Nigeria’s external sector recorded stronger resilience in the second quarter of 2025, as the Central Bank of Nigeria (CBN) confirmed that the country’s current account surplus rose to $5.28 billion, a sharp increase from $2.85 billion in the first quarter.
The CBN announced this in an updated Frequently Asked Questions (FAQ) document published on its official website on Tuesday.
According to the disclosure, gross external reserves also climbed steadily, reaching $43.05 billion as of September 11, the highest level in over six years. The reserves provide 8.28 months of import cover, reinforcing confidence in the stability of the Nigerian economy.
“The growth in external reserves serves as a source of confidence to citizens, foreign and local investors, and other economic agents,” the apex bank stated.
Driving Factors Behind the Growth
The CBN attributed the improvement to stronger foreign exchange inflows, sustained exchange rate stability, tighter monetary policy, and a moderation in petroleum product prices. These, it explained, combined to produce a more favourable balance of payments outlook.
Data from the apex bank further revealed that reserves gained $692 million within just 18 days and have been on a consistent upward trajectory since 14 July 2025. The last time Nigeria’s external reserves approached a comparable level was in September 2019 when they stood at $41.99 billion.
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Confirming the development during his Independence Day address to Nigerians, President Bola Tinubu described the increase as a strong signal of economic progress and foreign investor confidence.
Policy Adjustments To Sustain Stability
In addition to the reserve growth, the monetary authority shed light on several recent policy decisions. One major shift was the reduction of the Cash Reserve Ratio (CRR) for commercial banks from 50% to 45%.
“The reduction seeks to ease the liquidity burden on commercial banks, thereby providing more room for productive lending and intermediation,” the CBN explained.
To curb excess liquidity from non-Treasury Single Account (TSA) public sector deposits, the Monetary Policy Committee (MPC) also introduced a 75% CRR on such funds. The bank stressed this was to prevent inflationary pressures that could derail the ongoing trend of disinflation.
Despite these changes, the CBN assured account holders that their funds remained safe and accessible, reiterating its role as a lender of last resort to commercial banks.
Interest Rate Decisions And Liquidity Management
The MPC also resolved to cut the Monetary Policy Rate (MPR) from 27.5% to 27%, citing a continued decline in inflation for five consecutive months.
“The MPC lowered the MPR by 50 basis points in anticipation of further decline in inflation for the remainder of 2025,” the CBN noted.
Additionally, the central bank announced an adjustment in the Standing Facilities corridor, moving from an asymmetric range of +500/-100 basis points to a symmetric corridor of +250/-250 around the policy rate. This, the CBN explained, was aimed at enhancing interbank efficiency and improving monetary policy transmission.
“Overall, this would encourage more active interbank trading and enhance monetary policy transmission,” the statement added.
Outlook
The CBN affirmed its commitment to striking a balance between inflation control and supporting economic recovery. It stressed that strengthening financial sector stability would enable banks to expand credit to Micro, Small and Medium Enterprises (MSMEs) and other key sectors of the economy.
“We are using conventional monetary policy tools to anchor inflation expectations while ensuring a stable and robust financial system,” the bank reiterated.
With reserves steadily climbing, inflation easing, and policy adjustments in place, Nigeria’s economic managers are banking on this momentum to sustain growth and attract more foreign investment in the coming quarters
