Abuja: The Central Bank of Nigeria (CBN) states that its monetary policy remained focused on price stability in 2025, relying on orthodox instruments. The CBN highlighted this in its recently released annual report for the 2025 fiscal year.
According to News Agency of Nigeria, although monetary policy was largely restrictive in 2025, an easing cycle was initiated at the September Monetary Policy Committee (MPC) meeting, as disinflation persisted. Consistent with its policy posture, the expansion in reserve and broad money moderated to 15.60 percent and 15.16 percent, respectively, compared with growths of 32.09 percent and 16.42 percent in 2024.
The increase in broad money was influenced by the rise in net domestic assets and the decline in net foreign assets, reflecting stability in the foreign exchange (FX) market and increased economic activity. Consumer credit outstanding fell by 19.89 percent, reflecting a reduction in personal loans during the review period. Despite sustained adverse economic conditions, the financial sector remained robust, stable, and resilient.
The Nigerian capital market was bullish in 2025, supported by robust corporate earnings and positive investor sentiment. The all-share index (ASI) rose by 51.19 percent to 155,613, surpassing the 150,000 mark, underscoring strong fundamentals and market depth. Market capitalisation grew by 37.01 percent to N149.74 trillion, buoyed by sustained risk-on sentiment and strong corporate earnings optimism.
The external sector remained buoyant, with an overall balance of payments surplus of 4.23 billion dollars (1.45 percent of GDP), compared with 6.83 billion dollars (2.71 percent of GDP) in 2024. This was supported by the current and capital account, which recorded a surplus of 14.04 billion dollars (4.82 percent of GDP). However, the financial account was in a lower net lending position of 1.69 billion dollars (0.58 percent of GDP), compared with 9.65 billion dollars (3.83 percent of GDP) in 2024, largely due to the withdrawal of foreign currency and deposit holdings by residents.
In spite of these developments, capital flow into the economy increased by 93.71 percent to 23.40 billion dollars in 2025, from 12.08 billion dollars. This was due to competitive returns in the domestic financial market and gains from ongoing reforms in the FX market, including the launch of the FX Code, which contributed to renewed investor confidence.
Nigeria’s international investment position recorded a higher net borrowing position, buoyed mainly by increased foreign direct investment (FDI) liabilities. While the stock of financial assets rose to 125.58 billion dollars from 116.73 billion dollars, net financial liability stood at 90.15 billion dollars, compared with 82.69 billion dollars in 2024. The stock of external reserves strengthened to 45.75 billion dollars and could finance 8.77 months of imports for goods and services or 13.33 months for goods only.
Sustained reforms in the FX market continued to foster stability and price discovery, with the Naira strengthening to N1,435.76/dollar at the end of the year, relative to N1,535.82/dollar at the end of 2024. On an annual basis, the exchange rate averaged N1,518.38/dollar in 2025, compared with N1,478.97/dollar in 2024.