Central Bank Governor Olayemi Cardoso explained that Nigeria's external reserves, now over $52 billion, are meant to protect against shocks and currency volatility, not to fund daily liquidity needs.

He highlighted that reserves have grown from $3 billion to $40 billion under his leadership, strengthening the country's ability to handle unexpected market disruptions.

Cardoso emphasized that a functional FX market should allow transactions without constant central bank intervention, reserving reserves for extreme scenarios like external shocks.

He noted that reforms have restored confidence in the FX system, with diaspora remittances rising above $600 million and targeting $1 billion by 2026.The CBN aims to build reserves organically through sustainable inflows rather than temporary measures.

Cardoso stressed that higher reserves provide flexibility to manage disruptions without fixing exchange rates, placing more responsibility on market efficiency.Businesses and investors must rely on transparent transactions, not administrative allocations, to access foreign currency.The governor warned that overusing reserves for routine needs could weaken the country's ability to handle larger shocks.