Yemi Cardoso CBN Governor
The Central Bank of Nigeria (CBN) has revealed that its monetary policy remained firmly focused on price stability throughout the 2025 fiscal year, driven predominantly by orthodox policy instruments.
According to the apex bank’s newly released 2025 Annual Report, monetary policy maintained a largely restrictive stance for most of the year. However, persistent disinflation enabled the Monetary Policy Committee (MPC) to initiate an easing cycle starting at its September meeting.
Consistent with this stance, growth in both reserve and broad money moderated significantly:
Reserve Money Growth: Slowed to 15.60% (down from 32.09% in 2024).
Broad Money Growth: Moderated to 15.16% (down from 16.42% in 2024).
The CBN noted that broad money expansion was driven by a rise in net domestic assets against a decline in net foreign assets—reflecting improved stability in the foreign exchange market and heightened domestic economic activity. Meanwhile, consumer credit outstanding dropped by 19.89%, primarily due to a decline in personal loans.
Financial Sector & Capital Market Performance
The apex bank affirmed that the financial sector remained robust, stable, and resilient, demonstrating strong defense mechanisms even under simulated adverse economic conditions.
Concurrently, the Nigerian capital market experienced a bullish run in 2025, buoyed by solid corporate earnings and positive investor sentiment:
All-Share Index (ASI): Jumped 51.19% to hit 155,613, crossing the historic 150,000 threshold.
Market Capitalisation: Expanded by 37.01% to reach N149.74 trillion.
External Sector and FX Reserves Strength
Nigeria’s external sector maintained a buoyant posture, recording an overall Balance of Payments surplus of $4.23 billion (1.45% of GDP), supported by a Current and Capital Account surplus of $14.04 billion (4.82% of GDP).
The Financial Account posted a lower net lending position of $1.69 billion (0.58% of GDP), down from $9.65 billion in 2024, mainly due to residents withdrawing foreign currency and deposit holdings.
Despite this, overall foreign capital inflows surged:
Capital Inflows: Soared by 93.71% to $23.40 billion (up from $12.08 billion in 2024), propelled by competitive financial market returns and FX market reforms, including the rollout of the FX Code.
External Reserves: Rose to $45.75 billion, capable of financing 8.77 months of imports for goods and services (or 13.33 months for goods alone).
Naira Appreciation & Investment Position
Ongoing FX market reforms enhanced price discovery and overall market stability. The Naira closed the year stronger at N1,435.76/$, compared to N1,535.82/$ at the end of 2024. On an annual average basis, the exchange rate stood at N1,518.38/$ in 2025 versus N1,478.97/$ in 2024.
Lastly, Nigeria’s International Investment Position reflected a higher net borrowing position, largely driven by increased Foreign Direct Investment (FDI) liabilities. Total stock of financial assets climbed to $125.58 billion (up from $116.73 billion in 2024), while net financial liabilities rose to $90.15 billion (up from $82.69 billion in 2024).
