By Boluwatife Oshadiya | August 6, 2026
Key Points
- CBN says its monetary policy remained focused on price stability in 2025 despite maintaining a largely restrictive stance
- Nigeria’s external reserves rose to $45.75 billion while the naira appreciated to ₦1,435.76/$ at year-end
- The apex bank says stronger investor confidence and FX reforms supported capital inflows and a bullish stock market
Main Story
The Central Bank of Nigeria (CBN) says its monetary policy remained firmly focused on restoring price stability throughout 2025, relying on orthodox monetary tools while gradually easing policy as inflationary pressures moderated.
According to the apex bank’s 2025 Annual Report, monetary policy remained largely restrictive for most of the year before the Monetary Policy Committee (MPC) initiated an easing cycle during its September meeting following sustained disinflation.
The report showed that reserve money growth slowed to 15.60 per cent, while broad money supply expanded by 15.16 per cent, significantly lower than the 32.09 per cent and 16.42 per cent recorded respectively in 2024. The CBN attributed the increase in broad money to higher net domestic assets and declining net foreign assets, reflecting improved foreign exchange market stability and stronger economic activity.
Consumer credit outstanding declined by 19.89 per cent, largely due to lower personal loan balances during the review period, while the banking sector remained resilient under both mild and moderate stress scenarios.
Beyond monetary policy, the CBN said Nigeria’s capital market delivered one of its strongest performances in recent years. The Nigerian Exchange All-Share Index (ASI) gained 51.19 per cent to close at 155,613 points, crossing the 150,000-point threshold for the first time, while market capitalisation increased by 37.01 per cent to ₦149.74 trillion, supported by robust corporate earnings and improved investor sentiment.
On the external front, Nigeria recorded a $4.23 billion balance of payments surplus, supported by a $14.04 billion current and capital account surplus, although the financial account recorded lower net lending due mainly to withdrawals of foreign currency deposits by residents.
The report also noted that capital inflows surged 93.71 per cent to $23.40 billion in 2025, driven by attractive domestic yields, ongoing foreign exchange reforms and the implementation of the Nigerian FX Code, which helped strengthen investor confidence.
Nigeria’s gross external reserves increased to $45.75 billion, providing import cover of 8.77 months for goods and services, while sustained reforms in the foreign exchange market supported the naira’s appreciation to ₦1,435.76 per US dollar at the end of 2025 from ₦1,535.82/$ at the end of 2024.
“Although monetary policy was largely restrictive in 2025, an easing cycle was initiated at the September MPC as disinflation persisted,” the Central Bank of Nigeria said in its 2025 Annual Report.
What’s Being Said
The CBN maintains that its combination of tight monetary policy, foreign exchange reforms and improved market discipline helped restore macroeconomic stability during the year.
Analysts have also pointed to stronger foreign portfolio inflows, improved exchange rate transparency and higher external reserves as signs that investor confidence is gradually returning to Nigeria’s financial markets, although inflation management remains a key policy challenge.
What’s Next
- Investors will closely monitor the CBN’s next Monetary Policy Committee decisions to assess whether the easing cycle will continue.
- Market participants are expected to watch inflation, exchange rate stability and foreign capital inflows as key indicators of the sustainability of the CBN’s policy reforms.
- The performance of Nigeria’s external reserves and implementation of ongoing FX market reforms will remain critical to maintaining investor confidence.
Bottom Line:
The CBN’s 2025 Annual Report suggests that its aggressive monetary tightening and foreign exchange reforms have begun producing measurable gains in financial market stability, reserve accumulation and investor confidence. The next challenge will be sustaining those gains while supporting economic growth and ensuring inflation continues on a downward path.
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