CBN Gains Global Recognition with Emergence as Central Bank of the Year
The Central Bank of Nigeria (CBN) was last week, named the Central Bank of the Year 2026 by the Central Banking Awards Committee in London. The recognition reflects CBN’s roles in Nigeria’s major economic management and turnaround. The award, announced during the 13th annual Central Banking Awards, places global attention on Nigeria’s financial sector reforms and the role of the apex bank in stabilising the economy. The honour further highlighted pre-reforms challenges and ongoing rebound in exchange rate, foreign investment inflows and stability in domestic economy.
The Central Bank of Nigeria (CBN) under its Governor, Olayemi Cardoso has been acknowledged globally for the significant impact his leadership has made in steering the economy to the path of growth and stability.
According to the Central Banking Awards Committee, Nigeria’s economy was in a deep crisis before the current reforms began.
When President Bola Tinubu took office in May 2023, the committee noted that he met an economy close to what they described as “hyperinflation” and “fiscal bankruptcy,” with the naira losing value rapidly and inflation rising continuously. The administration responded with key reforms, including the removal of fuel subsidies and the liberalisation of the foreign exchange market.
However, the early impact of these policies was difficult for many Nigerians, as prices rose sharply and inflation climbed to 34.80 per cent by December 2024, the highest level in nearly three decades.
Despite these challenges, the committee said the CBN, under its governor Olayemi Cardoso, introduced reforms aimed at restoring stability, rebuilding confidence and strengthening the financial system. The approach focused on disciplined monetary policy, institutional changes and improved transparency.
Cardoso moved to end quasi-fiscal interventions where the central bank had been lending directly to sectors of the economy, a practice that contributed to rising inflation. The bank also carried out internal restructuring, reducing staff numbers, addressing misconduct and redeploying workers to areas where they were needed.
A senior official of the apex bank said governance and transparency became central to its operations. According to the official, the CBN improved how it communicates policy decisions, strengthened accountability and adopted analytical tools to guide economic decisions.
One of the most important reforms was in the foreign exchange market. The CBN introduced a willing-buyer, willing-seller system to replace multiple exchange rate windows. It also launched an electronic foreign exchange matching system to improve transparency and pricing.
Cardoso said the reforms have significantly reduced the gap between official and parallel market rates to less than two per cent, compared to over 60 per cent previously. He added that the bank has cleared the backlog of foreign exchange obligations, which helped restore confidence among investors and businesses.
The country’s external reserves have also improved, reaching about $46.7 billion by November 2025, the highest level in nearly seven years. The International Monetary Fund commended Nigeria’s efforts, noting that reforms in the foreign exchange market have improved liquidity and price discovery.
The CBN has also taken steps to strengthen the financial markets by working with the Securities and Exchange Commission and the National Pension Commission to improve transparency in the fixed-income market and support long-term investment.
On inflation, the apex bank raised interest rates from 18.75 per cent in 2023 to 27.5 per cent by late 2024 in a bid to control rising prices. These measures have started to yield results, with inflation dropping to about 15.10 per cent by January 2026. The bank has since made small reductions in interest rates as inflation pressures eased.
Cardoso said the CBN remains determined to bring inflation down further, noting that the current level is still too high. He explained that the bank is working towards adopting an inflation-targeting framework with support from the International Monetary Fund and the Bank of England.
Chairman of the Central Banking Awards Committee, Christopher Jeffery, said the Nigerian central bank showed strong leadership during a difficult period.
“The CBN’s leadership team has demonstrated plenty of courage and the CBN showed significant institutional strength to facilitate the rebuilding of unencumbered FX reserves and declining inflation, facilitating measurable progress toward sustainable growth and enhanced financial inclusion,” he said.
The recognition also points to improvements in governance and transparency within the apex bank. Over the past year, the institution has taken steps to streamline its operations, reduce unnecessary costs and improve communication with the public and investors.
Reforms in the banking sector, including recapitalisation efforts, have also strengthened financial institutions, making them better able to support economic growth.
Another area that contributed to the award is the modernisation of Nigeria’s payments system. The central bank has been working on new frameworks to improve digital payments, encourage innovation and expand financial inclusion.
These efforts are particularly important in a country where millions of people still lack access to formal banking services. By improving payment systems and supporting fintech innovation, the CBN aims to bring more Nigerians into the financial system.
The bank’s progress in addressing issues raised by the Financial Action Task Force, including its removal from the grey list, also played a role in boosting Nigeria’s reputation in the global financial community.
Taken together, these reforms have started to change how investors view Nigeria. There is now growing confidence that the country is on a more stable and predictable economic path.
This confidence was evident during recent engagements with global investors in London, where Cardoso explained the direction of the reforms and their impact on the economy.
Managing Director and Chief Executive Officer of Ambosit Capital Managers, Dr. Wahab Balogun, stated that “this award for the Central Bank of Nigeria is more than just recognition—it sends a strong signal about where Nigeria’s economy is heading and how the global financial community now views the country.”
For Nigeria, it means credibility is returning. Balogun noted that “for several years, investors were uncertain about Nigeria because of policy inconsistencies, foreign exchange restrictions and high inflation. When a respected global platform names Nigeria’s central bank the best for the year, it tells investors that the country is becoming more stable and more predictable. That matters because investors don’t just look at profits—they look for environments where rules are clear and risks are manageable.”
This kind of recognition he said can help Nigeria attract more foreign investment. Investors who were previously cautious may now begin to reconsider, especially in sectors like banking, fintech, agriculture and infrastructure. It also strengthens Nigeria’s position when negotiating with international partners such as development banks and foreign governments.
CBN moves to consolidate FX gains
The CBN is moving to consolidate recent gains in the foreign exchange market with plans to introduce a new policy framework, including an FX manual designed to expand market participation, tighten documentation standards, enhance surveillance, and ensure consistent implementation of reforms.
The proposed FX manual will strengthen oversight of the electronic foreign exchange matching system (EFEMS) while eliminating the risk of policy reversals that previously undermined market confidence.
The document, titled The Central Banking Awards 2026, was authored by Christopher Jeffery, Daniel Hinge, Daniel Blackburn, Joasia Popowicz, Levente Koroes, Thomas Chow, Jono Thomson, Riley Steward and Blake Evans-Pritchard.
The apex bank has also intensified efforts to develop a functional, transparent, and liquid fixed-income market, seen as critical for effective monetary policy transmission and the mobilisation of long-term domestic savings. In collaboration with the Securities and Exchange Commission and the National Pension Commission, the CBN has established rules to transition the over-the-counter secondary market into a more transparent and robust regulatory framework aimed at better serving investors and market participants.
“These reforms are foundational steps towards ensuring that Nigeria’s financial markets can support deeper investment, accurate pricing and stronger monetary policy transmission,” Cardoso said.
A major pillar of the reform agenda has been the overhaul of the FX market. The Central Bank transitioned to a willing-buyer, willing-seller framework, replacing the multiple-window regime with a more transparent and market-driven system.
Cardoso’s team introduced the electronic foreign exchange matching system (EFEMS), powered by Bloomberg BMatch, transforming FX trading through mandatory order submission, real-time regulatory visibility, and improved price discovery. The CBN also launched the Nigerian Foreign Exchange Code to promote ethical conduct among market participants.
Crucially, the Central Bank cleared what Cardoso described as a “once crippling” backlog of FX obligations across key sectors such as aviation and manufacturing, helping to restore credibility and boost business confidence.
The reforms have reduced opacity and curtailed manipulation, restoring discipline to the market. “The naira now trades within a narrow, stable range. The once-substantial gap between the official and parallel markets has shrunk to under 2 percent, down from over 60 percent,” Cardoso said in December 2025. “We are committed to maintaining the current flexible exchange-rate framework that allows the naira to act as a shock absorber while limiting excessive volatility.”
Improved market functioning, stronger non-oil exports, and robust capital inflows have supported a steady rebuilding of Nigeria’s FX reserves without reliance on borrowing. Gross reserves rose to 46.7 billion dollars by mid-November 2025, the highest level in nearly seven years, providing more than 10 months of import cover, while net reserves are reported to be at a three-year high.
The International Monetary Fund (IMF), in its July 2025 Article IV assessment, noted that directors welcomed steps taken by the authorities to rebuild reserves, support market confidence, and enhance liquidity and price discovery in the FX market.
Tackling inflation has also remained a central focus of the CBN’s policy stance as it returns to orthodox monetary policy. The bank raised interest rates sharply from 18.75 percent in 2023 to 27.5 percent by November 2024. As a result of tight monetary conditions and complementary measures, inflation has declined significantly from more than 32 percent in December 2024 to 16.05 percent in October 2025, and further to 15.10 percent by January 2026, with food inflation easing to 8.9 percent.
The moderation in inflation and expectations created room for cautious easing. The CBN reduced its policy rate by 50 basis points to 27 percent in September 2025, its first rate cut since 2020 and again by 50 basis points in February 2026 to 26.5 percent. This calibrated approach reflects efforts to safeguard macroeconomic stability while gradually lowering borrowing costs.
Cardoso has reiterated the bank’s “determination to bring inflation down further,” noting that the current double-digit rate remains unacceptable. The CBN is working with the IMF and the Bank of England to support a transition from monetary aggregate targeting to an inflation-targeting framework.
“Our transition to an inflation-targeting framework is gaining traction. We have improved data analytics, strengthened communication, and ended monetary financing of fiscal deficits. These actions have strengthened monetary policy transmission and anchored expectations,” Cardoso said in December.
The CBN’s models project continued disinflation in 2026, supported by stronger domestic production, improved FX liquidity, and more disciplined liquidity management. The bank maintains that monetary policy will remain evidence-based, data-driven, and unwavering in its pursuit of price stability.
The apex bank also emphasised improved coordination between monetary and fiscal authorities, noting closer collaboration with the Financial Services Regulation Coordinating Committee to ensure that monetary policy actions are aligned and do not operate in isolation.
