Key points
- CBN says restrictive monetary policy helped moderate money supply growth and supported disinflation in 2025.
- Foreign capital inflows rose by 93.7% to $23.4bn as investor confidence improved.
- External reserves increased to $45.75bn while the naira ended the year stronger against the dollar.
Main story
The Central Bank of Nigeria (CBN) says its monetary policy remained focused on maintaining price stability in 2025, using orthodox policy tools while initiating a gradual easing cycle after inflationary pressures began to subside.
The apex bank disclosed this in its 2025 Annual Report, noting that although its monetary policy stance remained largely restrictive during the year, persistent disinflation enabled the Monetary Policy Committee (MPC) to begin easing measures from September.
According to the report, reserve money and broad money growth moderated to 15.60 per cent and 15.16 per cent respectively, compared with 32.09 per cent and 16.42 per cent recorded in 2024.
The CBN attributed the increase in broad money to higher net domestic assets and lower net foreign assets, reflecting improved foreign exchange market stability and stronger economic activity.
It also reported that consumer credit outstanding declined by 19.89 per cent due to lower personal loan balances, while the financial system remained stable and resilient under both mild and moderate stress scenarios.
The report highlighted a strong performance in the Nigerian capital market, with the All-Share Index rising by 51.19 per cent to 155,613 points, supported by robust corporate earnings and improved investor sentiment.
Market capitalisation also increased by 37.01 per cent to N149.74 trillion during the year.
On the external sector, the CBN reported a balance of payments surplus of $4.23 billion, supported by a current and capital account surplus of $14.04 billion.
Although the financial account recorded lower net lending than in 2024 due mainly to residents withdrawing foreign currency deposits, capital inflows into the economy rose by 93.71 per cent to $23.40 billion.
The bank attributed the increase to attractive domestic market returns, ongoing foreign exchange reforms and the introduction of the FX Code, which strengthened investor confidence.
According to the report, Nigeria’s external reserves rose to $45.75 billion, providing import cover of 8.77 months for goods and services.
The CBN also said continued reforms in the foreign exchange market improved price discovery, with the naira appreciating to N1,435.76 per dollar at the end of 2025 from N1,535.82 per dollar a year earlier.
The issues
The CBN maintained a tight monetary policy stance through most of 2025 to curb inflation while implementing reforms aimed at improving foreign exchange market transparency and restoring investor confidence. The report suggests those measures contributed to stronger capital inflows, improved external reserves and greater exchange rate stability.
What’s being said
“Although monetary policy was largely restrictive in 2025, an easing cycle was initiated at the September MPC, as disinflation persisted.” — Central Bank of Nigeria.
“Sustained reforms in the FX market continued to foster stability and price discovery in the market.” — Central Bank of Nigeria.
What’s next
The CBN is expected to continue balancing inflation control with supporting economic growth while sustaining foreign exchange reforms, maintaining financial system stability and monitoring capital flows.
Bottom line
The CBN says its combination of tight monetary policy and foreign exchange reforms helped stabilise key macroeconomic indicators in 2025, laying a stronger foundation for investor confidence and economic stability.
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