Manny Ita –
The Central Bank of Nigeria (CBN) has announced the implementation of new liquidity control measures aimed at curbing pressure on the naira and stabilising the foreign exchange market, as Governor Olayemi Cardoso cautioned that environmental threats pose significant financial risks to Africa’s economies.
Speaking on Tuesday, Cardoso said the apex bank is deploying targeted monetary tools to manage excess liquidity in the financial system, which he noted has contributed to exchange rate volatility. He stated that the measures are part of broader efforts to restore investor confidence and ensure macroeconomic stability.
“We are committed to deploying appropriate liquidity controls to curb speculative pressures and support the stability of the naira,” Cardoso said. “Price stability and exchange rate stability remain central to our mandate.”
The governor explained that tightening liquidity conditions would help moderate inflationary pressures and reduce demand-driven strain on the foreign exchange market. He added that the bank would continue to monitor market developments and adjust its interventions where necessary.
Market analysts say recent volatility in the naira has been driven by a combination of global economic headwinds, capital flow dynamics, and domestic structural challenges. The CBN’s renewed focus on liquidity management is seen as an attempt to anchor expectations and limit speculative activities in the currency market.
In addition to outlining monetary policy actions, Cardoso stressed the growing link between environmental sustainability and economic resilience, warning that climate-related shocks could destabilise financial systems if not adequately addressed.
“Climate risk is financial risk,” he said. “For Africa, environmental changes are not abstract concerns. They have direct fiscal implications, affecting agricultural output, infrastructure, insurance markets, and ultimately macroeconomic stability.”
He noted that climate-induced disruptions such as flooding, drought, and extreme weather events can strain public finances and increase sovereign risk, particularly in developing economies heavily reliant on agriculture and natural resources. According to him, central banks and financial regulators must incorporate climate considerations into risk assessment frameworks.
Cardoso further indicated that the CBN is working to integrate sustainability principles into banking supervision and financial sector policies, encouraging institutions to factor environmental risk into lending and investment decisions.
The apex bank reiterated its commitment to maintaining monetary discipline while supporting long-term economic transformation. Officials said the combined focus on liquidity management and climate risk awareness reflects a broader strategy to safeguard Nigeria’s financial system against both immediate market pressures and emerging structural threats.
Economic stakeholders are expected to closely watch the impact of the new liquidity controls on inflation, exchange rates, and overall market confidence in the coming months.
