Foreign Reserves Jump to $46.7bn, Highest in Seven Years

The Central Bank of Nigeria (CBN) has revealed that Nigeria’s foreign reserves have risen to $46.7 billion as of November 14, 2025, which translates to 10.3 months of import cover in goods and services.

CBN Governor, Mr. Olayemi Cardoso, represented by the Deputy Governor, Economic Policy Directorate, Mr. Muhammad Sani Abdullahi, made the disclosure at a colloquium marking the 20th anniversary of the Bank’s Monetary Policy Department (MPD) in Abuja on Tuesday.

“Inflation has moderated significantly to 16.05 per cent as of October 2025, from a peak of 34.6 per cent in November 2024, marking seven consecutive months of disinflation, the lowest in three years.

“Core inflation has also begun to soften, suggesting that the cumulative impact of tight policy settings is transmitting through the economy.

“The exchange rate has stabilized with the naira continuing to strengthen, while the spread between the official and Bureau de Change rates are below two per cent. This stability has restored investor confidence and reduced uncertainty for households and firms.

“Also, foreign reserves have risen to $46.7 billion as of November 14, 2025, providing 10.3 months of import cover in goods and services, supported by sustained inflows and renewed investor participation across various asset classes. This accretion reflects investor confidence in our policies leading to improved oil receipts, stronger balance of payments, and renewed foreign portfolio inflows.”

Cardoso linked the rising confidence to recent upgrades of Nigeria’s sovereign outlook by the three leading international ratings agencies, including S&P Global Ratings, which recently revised Nigeria’s outlook from stable to positive. According to him, the upgrade “reflects the impact of sustained reforms that have placed our economy on a more resilient path.”

He also noted that Nigeria’s removal from the Financial Action Task Force (FATF) Grey List marked “another significant milestone in restoring international confidence in our financial system.”

Cardoso stated that the development shows “our full alignment with global standards on anti-money laundering and counter-terrorism financing,” adding that it opens more opportunities for foreign investment and trade finance.

The CBN Governor said the combination of these developments has strengthened the currency, boosted trade balances and provided a firmer base for inclusive growth.

Full-fledged inflation targeting underway

Speaking on the role of the MPD, Cardoso described the Department as central to the Bank’s policy architecture.

He noted that it supports the Monetary Policy Committee (MPC) and the Monetary Policy Technical Committee (MPTC) with research, analysis and coordination to ensure coherence in decision-making.

A major task ahead, he said, is the Bank’s transition to a full inflation-targeting regime.

Cardoso stressed that the shift is “a strategic imperative for anchoring expectations and sustaining price stability.”

He added that inflation targeting will promote transparency, boost credibility and improve how monetary policy decisions transmit through the economy.”

Director of the Monetary Policy Department, Dr. Victor Oboh, in his address, traced the evolution of the department from its early team-based structure to a modern system built around five specialized divisions covering macroeconomic analysis, monetary policy, committee coordination, international economic relations and policy research.

He said the department has consistently produced experts who have served as special advisers and directors to successive CBN governors.

Oboh noted that the department has grown into a strategic centre of the Bank’s policy framework, supporting the MPC with high-level research and analysis that aligns Nigeria’s policy decisions with global standards.

He recalled key historical moments—such as the global financial crisis, commodity price shocks and the COVID-19 pandemic—where MPD’s capacity “proved its resilience and relevance.”

The MPD Director further explained that Nigeria’s gradual migration toward inflation targeting followed lessons from global and domestic crises.

According to him, the CBN moved from an exchange rate targeting framework to monetary targeting, before adopting a hybrid model that integrates elements of inflation targeting.

Oboh said the Bank has made significant progress since announcing its decision to adopt inflation targeting in late 2023. “We have pursued a disciplined monetary policy stance, hosted high-level monetary policy forums to deepen dialogue on disinflation, and strengthened policy communication to anchor expectations,” he said.

He added that these efforts have helped moderate inflation, stabilize the foreign exchange market, reduce exchange rate gaps, and increase external reserves to more than $46 billion. “Today, we stand at an advanced stage of this phased migration, integrating elements of inflation targeting into our hybrid framework while laying the foundation for a credible, forward-looking regime that will restore price stability and further strengthen investor confidence,” Oboh stated.

Reflecting on the theme of the anniversary, “Monetary Policy in Nigeria: Past, Present and Future,” Oboh described it as a moment for reflection and projection.

He said the MPD’s work over two decades has strengthened credibility, supported transparency, and sustained public confidence in monetary policy.

Looking ahead, he noted that the future of monetary policy would require even greater innovation and coordination. Oboh pointed out that global fragmentation, digital currencies such as stablecoins, and climate-related financial risks will demand that MPD remains agile, data-driven, and forward-looking.

In October that the naira was making its strongest gain in the year with the improvement attributed to surge in foreign reserves to $43.05 billion and drop in speculative FX activities as the impact of the Central Bank of Nigeria (CBN’s) reforms continue to drive positive sentiments and confidence across markets, according to analysts.

Subsequently, the local currency rebound is being driven by a combination of stronger demand for the naira, reduced speculative trading, and rising foreign reserves which was $43.05 billion in October.

Besides, the forex reforms instituted by the CBN Olayemi Cardoso are now yielding great benefits from reduction in forex speculation and narrowing of gaps between official and parallel markets.

The apex bank had said it is boosting FX supply to retail end users, reducing distortions in the market and maintaining effective foreign reserves management and accretions.

The CBN governor Cardoso announced before then that gross external reserves remained robust at $43.05 billion on September 11, 2025, compared with $40.51 billion at end-July 2025 with an import cover of 8.28 months.

“Similarly, the second quarter 2025 current account balance recorded a significant surplus of $5.28 billion compared with $2.85 billion in the first quarter of 2025,” he said during the MPC meeting in September.