CBN Pumps $7.5 Billion to Keep Naira Afloat as Currency Ends 2025 Strongly
- CBN injected $7.53 billion to stabilise the naira, closing 2025 with a 7.14% gain
- Nigeria recorded a balance of payments surplus of $4.60 billion in Q3 2025, reversing previous deficits
- The naira appreciated by 6.5% in 2025, marking its first annual gain since 2012 amid foreign exchange reforms
The Central Bank of Nigeria (CBN) spent about $7.53 billion intervening in the foreign exchange market in 2025, helping the naira close the year with a 7.14 per cent gain.
The scale of intervention underscored the monetary authority’s resolve to stabilise the currency amid volatile global conditions and heavy capital outflows earlier in the year.
Source: Twitter
At the official window, the naira settled at N1,435.75 to the dollar, outperforming earlier market expectations. Several analysts had projected a year-end rate around N1,450, with more pessimistic forecasts putting the currency near N1,500 without sustained support.
FX Interventions outpace reserve growth
The $7.53 billion deployed to defend the naira exceeded the year-on-year increase in Nigeria’s gross external reserves, which rose by $4.62 billion in 2025. Reserves growth was supported by Eurobond inflows, steady remittances, and higher crude oil output.
Pressure on the currency intensified in the first half of the year, when U.S. tariff hikes triggered global risk aversion.
MarketForces Africa reported significant capital outflows from Nigerian financial markets as foreign investors moved to safe-haven assets.
To manage these exits, the CBN stepped up interventions, spending an estimated $5 billion to meet foreign portfolio investors’ demand for dollars.
Balance of payments swings to surplus
Nigeria’s external position improved sharply in the third quarter of 2025. Data from the CBN showed an overall balance of payments (BOP) surplus of $4.60 billion, a reversal from the deficit recorded in the previous quarter.
The turnaround was driven by a current account surplus of $3.42 billion, reflecting stronger trade performance, resilient remittance inflows, and improved financial flows.
The goods account remained firmly in surplus at $4.94 billion, buoyed by higher export earnings.
Oil, refined fuel exports boost trade
Crude oil exports rose to $8.45 billion in the quarter, while exports of refined petroleum products jumped 44 per cent to $2.29 billion.
The surge highlighted gains from increased domestic refining capacity and Nigeria’s gradual shift from a net importer to a net exporter of refined fuel.
Total goods exports reached $15.24 billion, while imports of refined petroleum products fell by 12.7 per cent.
The combined effect significantly improved the country’s trade balance and eased pressure on the foreign exchange market.
Remittances, capital flows strengthen buffers
Workers’ remittances remained a major support pillar. The secondary income account posted a surplus of $5.50 billion, including $5.24 billion in inflows from Nigerians in the diaspora.
On the financial account, Nigeria recorded a net lending position of $0.32 billion. Foreign direct investment rose to $0.72 billion, while portfolio investment inflows stood at $2.51 billion, signalling improving investor confidence and sustained non-resident participation in local assets.
Reserves rise, outlook firms
Nigeria’s external reserves climbed to $42.77 billion at the end of September 2025, up from $37.81 billion in June, strengthening external buffers.
The CBN said the Q3 BOP outcome reflects firmer external fundamentals, improved investor sentiment, and the impact of ongoing reforms in the FX market, monetary policy, and the domestic energy sector.
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Together, aggressive FX support and improving fundamentals helped the naira end 2025 on a stronger footing, even as global risks persisted.
Experts say the CBN's move may likely continue in 2026, as Nigeria enters into a strong politicking period, when focus shifts from economy to politics.
"We expert CBN to step up the interventions in 2026 as Nigeria's polity heats up and the government shifts focus to heavy politicking this year," Osas Igho, a financial analyst, told Legit.ng.
He said the apex bank is expected to maintain a firm grip on the economy, especially stabilising the foreign exchange market in 2026.
Naira breaks 13-year record, appreciates 6.5% in 2025
Legit.ng previously reported that the naira closed 2025 on a historic note, recording its first full-year appreciation in more than a decade as foreign exchange reforms by the Central Bank of Nigeria (CBN) began to reshape market confidence.
Data from the apex bank show that the currency strengthened by 6.5 per cent year-on-year, ending December 31 at ₦1,435 to the dollar, compared with ₦1,535 at the close of 2024.
This marks the naira’s first annual gain since 2012, when it edged higher to ₦157.29 from ₦158.99 the previous year.
Source: Legit.ng
