The Central Bank of Nigeria (CBN) has defended its monetary and foreign exchange reforms, telling the Senate that the measures have improved macroeconomic stability, restored investor confidence and strengthened the foundation of the economy.
However, lawmakers raised concerns over the impact of the reforms on credit availability, inflation, bank recapitalisation, foreign exchange management, liquidity operations and consumer protection.
The issues were discussed during a statutory engagement between the CBN and the Senate Committee on Banking, Insurance and Other Financial Institutions. The meeting, chaired by Senator Mukhail Adetokunbo Abiru, was held in accordance with the CBN Act, which requires the governor of the apex bank to brief the National Assembly twice a year.
It was the committee’s first interaction with the CBN in 2026.
CBN Governor Olayemi Cardoso, who led a delegation of deputy governors and senior officials, told lawmakers that reforms introduced over the past three years had delivered significant progress despite global economic pressures.
He said the first half of 2026 recorded further gains in inflation management, exchange rate stability, external reserves growth and banking sector reforms.
Cardoso explained that headline inflation, which increased temporarily from 15.06 percent in February to 15.93 percent in May due to geopolitical pressures, eased slightly to 15.91 percent in June, reflecting the impact of the bank’s monetary policy measures.
On foreign exchange reforms, the governor said the changes had improved transparency, reduced speculative activities and boosted investor confidence. He disclosed that the average exchange rate strengthened to N1,375.40 per dollar during the first half of 2026, while official diaspora remittances rose from about $200 million to more than $600 million monthly.
The CBN is targeting an increase in official remittance inflows to $1 billion monthly by the end of the year.
Cardoso also revealed that Nigeria’s external reserves stood at $52.73 billion as of July 9, while the banking sector recorded significant progress under the recapitalisation programme.
According to him, banks raised N4.65 trillion in fresh capital, with domestic investors accounting for 72.55 percent and foreign investors contributing 27.45 percent. He added that 33 banks had successfully met the new capital requirements, while discussions continued with institutions yet to complete the process.
“With recapitalisation now completed, our focus has shifted towards ensuring that stronger capital translates into improved governance, stronger risk management and greater support for productive sectors of the economy,” Cardoso said.
Earlier, Abiru acknowledged improvements in key economic indicators since the committee’s previous engagement with the CBN in December 2025. However, he stressed that the success of the reforms should ultimately be measured by their impact on businesses and ordinary Nigerians.
While praising the CBN for stabilising the foreign exchange market and implementing the recapitalisation exercise, he warned that stronger bank balance sheets must translate into increased lending to critical sectors.
He said agriculture, manufacturing, infrastructure, technology and small businesses should benefit from the increased capacity of banks.
“The true measure of a stronger banking system is not only the size of its balance sheet but its ability to mobilise savings effectively and provide affordable credit to productive sectors of the economy,” Abiru said.
The committee expressed concern that private sector lending had slowed despite banks raising substantial new capital. Lawmakers argued that stronger financial institutions should support economic growth rather than channel funds mainly into low-risk assets and short-term investments.
Other issues raised during the session included excessive bank charges, failed electronic transactions, cybersecurity risks, financial inclusion, the availability of quality naira notes and regulations governing financial holding companies.
The lawmakers also reviewed the CBN’s 2025 audited financial statements, questioning the sharp rise in Open Market Operations (OMO) liabilities, which reportedly increased from N24.3 trillion in 2024 to N48.7 trillion in 2025.
They sought explanations on the cost of liquidity management, rising operating expenses and the decision to offset the Federal Government’s Ways and Means advances through the CBN’s operating surplus rather than direct cash remittances.
The committee said these matters required greater transparency because of their implications for fiscal management and legislative oversight.
Following the public session, the Senate committee held a closed-door meeting with Cardoso and the CBN management team to further discuss the concerns raised.
