The Senate Committee on Banking, Insurance and Other Financial Institutions on Wednesday questioned the Central Bank of Nigeria (CBN) on inflation, bank recapitalisation, foreign exchange reforms, external reserves and other key monetary policies during a statutory oversight session.
The meeting, chaired by Senator Adetokunbo Abiru (APC, Lagos East), marked the committee’s first engagement with the apex bank in 2026, in line with the CBN Act, which requires the CBN governor to brief the National Assembly twice annually.
Leading the CBN delegation, Governor Olayemi Cardoso said the bank had consolidated the macroeconomic gains recorded in 2025 through coordinated policy measures implemented over the past three years.
“When I last appeared before this distinguished committee in December 2025, I reported encouraging progress in inflation moderation, foreign exchange market stabilisation, external reserves accumulation, reform of market infrastructure and significant advances in the banking sector recapitalisation programme.
“I am pleased to report that the first half of 2026 witnessed the consolidation of many of those gains,” Cardoso said.
Inflation eases after temporary spike
Cardoso told lawmakers that inflation resumed its downward trend after a temporary increase triggered by the Middle East conflict.
According to him, headline inflation rose from 15.06 per cent in February to 15.93 per cent in May before easing slightly to 15.91 per cent in June, reinforcing expectations of continued moderation.
“This outcome demonstrates the effectiveness of our monetary policy stance in containing second-round inflationary pressures and anchoring inflation expectations. We remain fully committed to restoring price stability and achieving single-digit inflation over the medium term,” he said.
FX reforms boost reserves, remittances
The CBN governor said reforms in the foreign exchange market have improved transparency, liquidity and investor confidence while reducing speculative activities and supporting naira stability.
He disclosed that the average exchange rate strengthened to N1,375.40 per dollar during the first half of 2026.
Cardoso also said diaspora remittances through official channels increased from about $200 million to over $600 million monthly, with the CBN targeting $1 billion in monthly inflows before the end of the year.
Nigeria’s external reserves, he added, climbed to $52.73 billion as of 9 July 2026.
Banks raise N4.65tn in fresh capital
On banking sector reforms, Cardoso said banks had raised N4.65 trillion through recapitalisation, with 72.55 per cent contributed by domestic investors and 27.45 per cent by foreign investors.
He disclosed that 33 banks have met the revised capital requirements, while discussions continue with the remaining institutions yet to comply.
“With recapitalisation now completed, our focus has shifted towards ensuring that stronger capital translates into improved governance, enhanced risk management and support for productive sectors of the economy,” he said.
Senate raises concerns
Earlier, Senator Abiru acknowledged improvements in inflation and foreign exchange market stability before external shocks from the Middle East pushed inflation higher.
He noted that inflation had fallen to 15.06 per cent in February, prompting the Monetary Policy Committee to reduce the Monetary Policy Rate from 27 per cent to 26.5 per cent, before rising again in May.
The committee chairman commended the CBN for stabilising the exchange rate, improving transparency in the foreign exchange market and implementing the banking sector recapitalisation programme.
However, he urged the apex bank to ensure the exercise translates into greater lending to productive sectors.
“Recapitalisation should not become an end in itself. Ultimately, the true measure of a stronger banking system lies not merely in larger balance sheets but in its capacity to mobilise savings efficiently and channel affordable credit to productive sectors of the economy,” Abiru said.
He also expressed concerns over banks yet to meet recapitalisation requirements, excessive banking charges, rising consumer complaints and growing cybersecurity risks within the financial sector.
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