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The decision to resume naira transactions came after an over three years moratorium on the use of naira-funded debit cards abroad. But with liquidity rising, the ban has been lifted.

Checks yesterday at the Nigeria Foreign Exchange Market (NFEM) indicated that the naira gained N9 by closing at N1,520 to a dollar as against N1,529 in the previous day.

Also at the parallel market, the currency appreciated 0.65% from N1,545/USD to N1,535/USD.

UBA, FirstBank, others lift ban

Three Tier-1 banks and a mid-tier bank, United Bank for Africa (UBA) Plc, FirstBank, GTBank and Wema Bank Plc respectively, have announced the resumption of international transactions on their naira debit cards.

The development comes about three years after many banks suspended international transactions on naira debit cards or dip in dollar liquidity, forcing many local lenders to restrict transactions of local cards abroad.

Transactions are, however, allowed for dollar-funded cards, usually linked to cardholders’ domiciliary accounts.

In a notice to customers, the UBA said the resumption aligns with its continued commitment to providing clients with seamless and enhanced banking experiences.

“In line with our continued commitment to providing you with seamless and enhanced banking experiences, we are pleased to inform you that all UBA Premium Naira Cards, including Gold, Platinum, and World variants are now enabled for international transactions,” the bank said.

“This means you can now use your Premium Naira Card for everyday payments, online shopping, POS, and ATM transactions across the world, with more ease and flexibility.

“If you haven’t used your card recently, now’s a great time to rediscover the convenience and prestige that comes with being a UBA premium cardholder.

In recent years, the Central Bank of Nigeria (CBN has implemented difficult reforms to tackle long-standing obstacles weighing on price and exchange rate stability, according to analysts.

The reforms are not only beginning to show positive results, but have triggered rise in international reserves, improved access to forex in the official market, dip in inflation figures and reignited use of naira cards for international transactions. For many analysts, Nigeria’s potential is huge and continued success requires collaborative  implementation mechanisms by monetary and fiscal authorities.

In 2023 the new administration and the CBN-led by its Governor, Olayemi Cardoso liberalized the foreign exchange market, stopped central bank financing of the fiscal deficit, and reformed fuel subsidies.

The government also strengthened revenue collection and took strategic steps to reduce surging inflation rate.

Since these reforms were implemented, international reserves have increased, and anyone can now access foreign exchange in the official market.

Analysis of FX inflows in the last few months showed that Nigeria attracted $5.96 billion monthly inflows from May 2025 till date.

Industry report showed that Nigeria’s foreign exchange market witnessed a significant boost in May, with total inflows rising by 62.0 per cent month-on-month (M-o-M) to $5.96 billion, driven largely by increased participation from domestic and foreign investors.

What experts are saying

Analysts at Financial Derivatives Company Limited attributed rising FX inflows to surge in oil prices and multiple inflow channels created by the Central Bank of Nigeria. 

Also in a report, head of financial institutions ratings at Agusto & Co, Ayokunle Olubunmi, said the improved liquidity in the foreign exchange (FX) market supported banks’ decision to reactivate their naira cards for global transactions.

“The moderating premium on the parallel market transactions and the reduced arbitrage opportunities is also responsible for the decision,” he said.

Records showed that many banks, including Stanbic IBTC Bank, United Bank for Africa, Access Bank, Standard Chartered Bank Nigeria, GTBank among others have at some point, reviewed international spending limit on naira cards, while at other times, suspended transactions on such cards, unless they are linked to dollar-funded domiciliary accounts.

Analysts stated that by allowing travelers to use their naira-cards abroad, the banks are making it easy for cardholders to pay their hotel bills, make reservations and carry out other transactions using their debit cards.

FX reserves position rises

The CBN recently announced a quantum leap in the net FX reserve position at $23.11 billion at the end of last year.

Cardoso had upon assuming office in October 2023, prioritized reforms to rebuild Nigeria’s economic buffers and strengthen resilience.

“Over the past year, we have undertaken critical reforms to unify Nigeria’s exchange rate, eliminating distortions and restoring transparency. This unification has enabled us to clear the outstanding foreign exchange obligations, giving businesses—ranging from manufacturers to airlines—the confidence to plan and invest in the future. To further enhance the functionality of the foreign exchange market, we are introducing an electronic FX matching system, which has proven effective in other markets,” Cardoso said.

Net FX reserve accretion surges

According to the apex bank data, NFER stood at $23.11 billion, the highest level in over three years, a marked increase from $3.99 billion at year-end 2023, $8.19 billion in 2022, and $14.59 billion in 2021.

The NFER, which adjusts gross reserves to account for near-term liabilities such as FX swaps and forward contracts, is widely regarded as a more accurate indicator of the foreign exchange buffers available to meet immediate external obligations.

Gross external reserves also increased to $40.19 billion, compared to $33.22 billion at the close of 2023.

The increase in reserves reflects a combination of strategic measures undertaken by the CBN, including a deliberate and substantial reduction in short-term foreign exchange liabilities – notably swaps and forward obligations.

The strengthening was also spurred by policy actions to rebuild confidence in the FX market and increase reserve buffers, along with recent improved foreign exchange inflows – particularly from non-oil sources.

Reserves have continued to strengthen in 2025. While the first quarter figures reflected some seasonal and transitional adjustments, including significant interest payments on foreign-denominated debt, underlying fundamentals remain intact, and reserves are expected to continue improving over the second quarter of this year.

Going forward, analysts say the CBN anticipates a steady uptick in reserves, underpinned by improved oil production levels, and a more supporting export growth environment expected to boost non-oil FX earnings and diversify external inflows.

The CBN remains committed to prudent reserve management, transparent reporting, and macroeconomic policies that support a stable exchange rate, attract investment, and build long-term resilience.

President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, said the policy shifts showed the level of creativity, policy and hard work the Cardoso puts in ensuring that more forex flows into the economy and remain accessible to businesses.

He said diaspora remittances to Nigeria, estimated at $23 billion annually remain a reliable source of forex to the domestic economy. There are also other sources and policies that are being explored by the apex bank to keep dollar inflows coming.

Way forward for economy

In emailed report, the IMF’s mission chief to Nigeria and an assistant director in the IMF’s African Department, Axel Schimmelpfennig disclosed that to address these challenges,

Nigeria needs stronger and more sustained growth to lift millions of people out of poverty and food insecurity, which is what the authorities are focusing on.

“This does not happen overnight. In the meantime, making growth more inclusive also requires scaling up the existing cash transfer system.  Second, as an essential ingredient for economic development, Nigeria needs an effective budget framework. Delivering effective investments in people and infrastructure requires realistic budget assumptions, strong expenditure management, and transparent implementation and reporting—which, in turn, can strengthen accountability. For its part, monetary policy should continue to decisively tackle inflation and reduce economic uncertainty,” he said.

Furthermore, IMF’s resident representative in Nigeria, Christian Ebeke, said the government should continue to increase domestic revenues.

“This is essential given Nigeria’s substantial funding needs in growth-enabling areas such as agriculture, infrastructure, including access to electricity, and climate adaptation. The government’s tax reforms will make it easier to pay taxes and ensure that everyone who owes taxes pays them”.

…CBN demands recapitalisation plan from banks 

Meanwhile, the Central Bank of Nigeria (CBN) has directed banks to submit a comprehensive Capital Restoration Plan (CRP) as part of its efforts to strengthen the banking sector and support the exit from the forbearance regime.

In a circular signed by Dr. Olubukola Akinniyi, Director of Banking Supervision, and published on the CBN’s website, the apex bank outlined the requirements for the CRP.

The CBN’s directive is aimed at ensuring that banks restore full regulatory compliance and maintain financial stability.

The CRP should detail the management’s proposed strategies to achieve this goal, including cost optimization initiatives, risk asset reduction, significant risk transfers, and necessary business model adaptations. Banks are expected to submit their CRPs to the CBN within 10 working days following the end of each quarter, effective from June 30, 2025.

This move is part of the CBN’s broader regulatory efforts to enhance the stability and resilience of the banking sector. The apex bank has also terminated forbearance exposure and Single Obligor Limits waivers, suspended payment of dividends, bonuses, and investments in foreign subsidiaries for affected banks.

Additionally, lenders are required to submit quarterly disclosures on key metrics, which will aid regulatory transparency and support supervisory oversight.