The Central Bank of Nigeria (CBN) deployed a massive $7.53 billion throughout 2025 to support the national currency, a decisive intervention that helped the naira close the year with a significant 7.14 per cent gain. This aggressive defence, orchestrated under the leadership of Governor Olayemi Cardoso, underscored the bank's commitment to stabilising the foreign exchange market against global volatility and substantial capital outflows experienced earlier in the year.
Naira Outperforms Forecasts Amid Heavy FX Interventions
At the official trading window, the naira concluded 2025 at a rate of N1,435.75 to the US dollar. This performance surpassed many market expectations, as several analysts had projected the currency would end the year closer to N1,450, with more pessimistic views suggesting it could weaken to around N1,500 without sustained central bank support.
The scale of the CBN's intervention was substantial, exceeding the year-on-year growth in Nigeria's gross external reserves. While the bank spent $7.53 billion defending the currency, the nation's external reserves increased by $4.62 billion over the same period. Reserve growth was bolstered by inflows from Eurobond issuances, consistent remittances from the diaspora, and a rise in crude oil production.
Balance of Payments Swings to $4.6 Billion Surplus
A major turnaround in Nigeria's external position became evident in the third quarter of 2025. Data released by the CBN revealed an overall balance of payments (BOP) surplus of $4.60 billion. This marked a sharp reversal from the deficit recorded in the preceding quarter and was primarily driven by a current account surplus of $3.42 billion.
The improvement was fueled by a stronger trade performance, with the goods account recording a robust surplus of $4.94 billion. A key development was the surge in exports of refined petroleum products, which jumped by 44 per cent to $2.29 billion, highlighting Nigeria's evolving capacity in domestic refining and its shift toward becoming a net exporter of fuel. Concurrently, crude oil exports rose to $8.45 billion for the quarter.
Remittances continued to serve as a critical buffer for the economy. The secondary income account, which includes these inflows, posted a surplus of $5.50 billion, with $5.24 billion coming directly from Nigerians living abroad.
Reserves Climb and Investor Confidence Improves
By the end of September 2025, Nigeria's external reserves had climbed to $42.77 billion, up from $37.81 billion in June. This strengthening of external buffers was complemented by improved investor sentiment. The financial account showed a net lending position of $0.32 billion, with foreign direct investment rising to $0.72 billion and portfolio investment inflows reaching $2.51 billion.
The CBN attributed the positive third-quarter BOP outcome to firmer external fundamentals, better investor confidence, and the ongoing impact of reforms in the foreign exchange market, monetary policy, and the domestic energy sector.
Financial analysts anticipate that the central bank will maintain its active role in the forex market through 2026. Osas Igho, a financial analyst, noted that the CBN is expected to sustain its interventions, especially as the nation's political climate intensifies with the approaching election cycle, potentially shifting government focus away from purely economic matters.
This concerted strategy of aggressive foreign exchange support, combined with improving economic fundamentals, enabled the naira to break a 13-year record. The currency appreciated by 6.5 per cent over the full year of 2025, marking its first annual gain since 2012, when it closed at ₦157.29 against the dollar.
