Nigeria recorded a strong improvement in its external sector performance in the second quarter of 2025, as the current account surplus surged to $5.28 billion, nearly double the $2.85 billion recorded in the first quarter.
The Central Bank of Nigeria (CBN) disclosed this in a Frequently Asked Questions (FAQ) update on its official website.
According to the apex bank, the surplus reflects increased foreign exchange inflows, tighter monetary policy measures, and relative stability in petroleum product prices.
The CBN also confirmed that Nigeria’s gross external reserves rose to $43.05 billion as of September 11, equivalent to 8.28 months of import cover.
Data further shows that reserves climbed past $42 billion on September 25, 2025 — their highest level in over six years — representing an increase of $692 million within just 18 days. The last time reserves approached such levels was September 27, 2019, when they stood at $41.99 billion.
“The growth in external reserves serves as a source of confidence to citizens, foreign and local investors, and other economic agents,” the CBN said in the update.
The CBN also used the FAQ to justify its recent Monetary Policy Committee (MPC) decision to reduce 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.
At the same time, the MPC introduced a 75% CRR on non-Treasury Single Account (TSA) public sector deposits to prevent excess liquidity from fueling inflation. Despite this, the CBN assured that account holders retain full access to their funds, with banks positioned to meet all legitimate obligations.
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The bank emphasized its dual mandate of inflation control and economic support, particularly for micro, small, and medium enterprises (MSMEs).
“We are using conventional monetary policy tools to anchor inflation expectations while ensuring a stable and robust financial system,” the CBN noted.
Analysts say the improvement in Nigeria’s current account and reserves signals resilience, but caution that sustaining the trend will depend on both global oil markets and structural reforms.
Dr. Ayo Teriba, CEO of Economic Associates, said the surplus and higher reserves reflect “the payoff of exchange rate stabilization and reduced import bills,” but warned that Nigeria must deepen export diversification.
“Oil still accounts for a large chunk of FX inflows. To sustain these gains, the country must grow non-oil exports aggressively while consolidating on remittance inflows,” he noted.
Similarly, financial economist and former banker, Mrs. Grace Adeniyi, observed that the CRR reduction could stimulate lending but advised close monitoring.
“The CBN’s balancing act is evident — reducing CRR to free up funds for the private sector while tightening controls on public sector deposits to curb inflation. The risk is whether commercial banks will channel this liquidity into productive lending, particularly for MSMEs,” she explained.
Meanwhile, FX market analyst, Mr. Kelechi Okoro, pointed out that the higher reserves will strengthen investor confidence.
“Crossing the $42 billion mark is not just symbolic, it provides a real cushion for the naira. It reassures investors that Nigeria can meet its external obligations, which is critical given the volatility in global capital flows,” he said.
