CBN Projects Single-Digit Inflation as Reforms Boost Naira, External Reserves, Investor Confidence
Cardoso tells Senate Nigeria’s economy remains resilient, says banking recapitalisation, forex reforms laying foundation for sustained growth
By Pan Afric Reporters
The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has assured the Senate that Nigeria is on course to achieving single-digit inflation over the medium term, citing sustained macroeconomic reforms, improved foreign exchange stability, stronger external reserves and renewed investor confidence as key indicators of economic recovery.
Cardoso gave the assurance while presenting the CBN Mid-Year 2026 Economic Report before the Senate Committee on Banking, Insurance and Other Financial Institutions, where he maintained that despite persistent global economic uncertainties, Nigeria’s economy has remained resilient and continues to record steady progress.
He said the first half of 2026 witnessed stable economic growth driven by improved performance across major sectors, stronger foreign exchange market reforms and a resilient banking system.
“We remain fully committed to restoring price stability and achieving single-digit inflation over the medium term,” Cardoso told lawmakers.
According to the CBN Governor, although geopolitical tensions, particularly the Middle East conflict, exerted temporary pressure on inflation through higher energy prices and supply chain disruptions, the country’s underlying disinflation trend has remained intact due to coordinated fiscal and monetary policies.
He explained that the Monetary Policy Committee (MPC) adopted a data-driven strategy by easing monetary conditions in February to stimulate economic growth before retaining the Monetary Policy Rate (MPR) at 26.5 per cent in May to consolidate gains against inflation.
Cardoso disclosed that headline inflation increased from 15.06 per cent in February to 15.93 per cent in May following global energy market disruptions but eased slightly to 15.91 per cent in June, signalling a gradual return to a downward trajectory.
“This outcome demonstrates the effectiveness of our monetary policy stance in containing second-round inflationary pressures and anchoring inflation expectations,” he said.
The apex bank governor also highlighted remarkable improvements in Nigeria’s foreign exchange market, attributing the gains to ongoing reforms aimed at enhancing transparency, governance and investor confidence.
He said the introduction of the fourth edition of the Foreign Exchange Manual, implementation of the Nigeria Foreign Exchange Code, and deployment of an electronic foreign exchange matching system have significantly improved price discovery and liquidity in the market.
According to Cardoso, the naira appreciated by about 7.95 per cent during the first half of 2026, with the average exchange rate strengthening to approximately ₦1,370.40 per United States dollar, compared to ₦1,490.21 recorded in the second half of 2025.
He further revealed that diaspora remittances through official channels have tripled, rising from about 200 million dollars monthly to over 600 million dollars, following exchange rate reforms and the introduction of the Non-Resident Bank Verification Number (BVN) initiative.
The CBN, he added, is targeting one billion dollars in monthly diaspora remittance inflows before the end of 2026.
Cardoso also informed lawmakers that Nigeria’s external reserves climbed to approximately 52.73 billion dollars as of July 9, 2026, reflecting stronger foreign exchange inflows and improved market fundamentals.
On the banking sector, he described the successful completion of the banking recapitalisation programme in March 2026 as one of the country’s most significant financial sector milestones.
According to him, the exercise attracted ₦4.65 trillion in fresh capital, with more than 72 per cent sourced from domestic investors and about 27 per cent from foreign investors, enabling 33 banks to meet the new minimum capital requirements.
Cardoso disclosed that discussions are ongoing to resolve the status of a few non-compliant financial institutions in a manner that safeguards financial stability and protects depositors.
He also highlighted the rollout of the Payments System Vision 2028, describing it as a comprehensive roadmap designed to build a secure, inclusive, innovative and globally competitive digital payments ecosystem.
The CBN Governor noted that Nigeria’s recent sovereign rating upgrades by Fitch Ratings, Moody’s and Standard & Poor’s reflect growing international confidence in the country’s macroeconomic reforms and economic management.
Looking ahead, Cardoso said the apex bank would prioritise post-recapitalisation supervision, deepen foreign exchange reforms, advance its transition towards an inflation-targeting framework, implement the Payments System Vision 2028 and continue strengthening financial system stability.
He reaffirmed the Central Bank’s commitment to preserving price stability, enhancing external sector resilience, safeguarding the financial system and supporting sustainable economic growth.
“With sustained collaboration between the National Assembly, fiscal authorities and other stakeholders, Nigeria is well positioned to consolidate recent gains and build a stronger, more competitive economy,” Cardoso stated.
