The research sheds light on a largely under-researched topic: What effects do physical and transition effects of climate change have for central banking transmitted through the balance-of-payments in the Global South? We conduct a country case study of Nigeria by triangulating primary qualitative data generated from ten semi-structured interviews with secondary quantitative data. The latter is used in a time series analysis, where we built two structured Vector Autoregressive models. We find that physical and transition risks both impact Nigeria‘s balance-of-payments through the financial and current account channel to the detriment of the central bank‘s objectives. Long-term physical effects of climate change and the strong oil dependence of Nigeria‘s domestic economy, its financial system and trade balance play a major role. Central banking in Nigeria is adversely affected when climate risks reduce foreign exchange income and increase the need thereof; when they put pressure on the exchange and inflation rate and undermine the acceptance of Nigerian financial assets. As a consequence, the central bank will have to keep interest rates notoriously high. These effects have recessionary implications for the domestic economy and impede economic diversification and a green transition in Nigeria.