FX pressures recede as reserves hit 18-year high, current account surplus rises 67.9%

The Central Bank of Nigeria (CBN) has revealed that foreign exchange pressures have receded as Nigeria’s external reserves climbed to $55.25 billion. In comparison, the country’s current account surplus rose by 67.92 per cent to $7.54 billion in the second quarter of 2026.

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The figures were included in the communiqué from the 307th meeting of the Monetary Policy Committee (MPC) on Tuesday, which noted stronger external-sector fundamentals and improved investor confidence.

CBN cut the benchmark interest rate to 23 per cent from 26.5 per cent to reset the Monetary Policy Rate (MPR) and recalibrate the policy corridor.

According to CBN, the current account surplus increased from $4.49 billion in the first quarter to $7.54 billion in the second quarter. In comparison, the balance of payments surplus rose from $2.38 billion to $3.51 billion over the same period.

CBN said the improvement in the external position has contributed to greater stability in the foreign exchange market.

Speaking after the meeting, CBN Governor Olayemi Cardoso said foreign exchange pressures had receded significantly and that the country had rebuilt its external buffers.

“Gross external reserves stood at US$55.25 billion as of September 18, 2026, the highest in 18 years, and sufficient to finance 11.3 months of import of goods and services.

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“Of course, we have been able to rebuild our reserves, and the whole conversation around rebuilding the reserves, we know that today, and it was mentioned in my communiqué that we are in excess of 55 billion US, the highest number in over 18 years,” he said.

Diaspora remittances

The governor also attributed part of the improvement in Nigeria’s external buffers to diaspora remittances, which he said had played an important role in strengthening the country’s resilience.

“In addition to that, and something that has also contributed to that is the whole issue of diaspora remittances, which you all hear me making reference to, and I’ve been doing so for such a long time, and I will continue to, because it has served a very helpful process in building up our resilience and building up our buffers,” Mr Cardoso said.

CBN has previously introduced measures to deepen diaspora remittances, including the Non-Resident Nigerian Ordinary Account and Non-Resident Nigerian Investment Account, which enable non-resident Nigerians to remit foreign earnings and manage or invest funds in Nigeria.

The governor said the improved external position had also supported greater stability in the foreign exchange market and contributed to renewed confidence in Nigeria’s financial markets.

“When we look at the capital markets, where is it coming from? It’s coming from the stability in the foreign exchange markets,” he said.

He added that the improvement in the external position was one of the factors giving the MPC confidence in its decision to reset the monetary policy framework.

MPR reset not monetary policy easing

At the MPC press briefing, CBN also clarified that its decision to reset the MPR to 23 per cent does not constitute a monetary policy easing.

Mr Cardoso said the changes were intended to strengthen the transmission of monetary policy and reinforce the MPR as the primary signal of monetary policy.

“The MPC emphasised that the recalibration of the corridor does not constitute a change in the current monetary policy stance, but rather an operational reset to enhance the effectiveness of monetary policy and support the transition to an inflation targeting framework,” the committee said.

While speaking to journalists after the meeting, the CBN boss said the reset was necessary because the existing monetary policy transmission mechanism was not working as effectively as the bank wanted.

“We have the firm belief that it has not been working as effectively as it should, the disinflation process is ongoing, and that’s a very positive thing”, he said.

READ ALSO: Multiple FX windows cost Nigeria 3% of GDP – CBN

Mr Cardoso said the decision was supported by Nigeria’s macroeconomic stability, including lower inflation, improved external reserves, reduced foreign-exchange pressures, and stronger investor confidence.

He said the CBN’s previous restrictive policy measures had achieved their intended objectives and that the reset was designed to make the monetary policy framework work more effectively.

The governor repeatedly cautioned against interpreting the MPR reset as an easing cycle.

“The tight thing that we have done, in our view, has done its job. It has worked. The policy tools we have used have worked.

“We will stay on the course which has been a restrictive one for as long as we have to, and that’s why I re-emphasise that you should not see this as an easing, it’s a reset and a recalibration. That is all it is,” he said.