Dollar inflows into Nigeria’s foreign exchange market rose sharply in December as increased sales by the central bank helped ease liquidity pressures, official data showed.
Total foreign exchange inflows climbed 38 percent month on month to US$2.8 billion in December 2025, according to figures from market operator FMDQ, rebounding from a steep 67 percent contraction recorded in November.
Despite the recovery, December inflows remained the second weakest level seen in the past 16 months, highlighting persistent fragilities in foreign currency supply.
The Central Bank of Nigeria (CBN) played a key role in the rebound, sharply increasing its dollar sales to $654 million in December from US$318 million a month earlier, analysts said.
“The improvement in FX supply was largely driven by heightened CBN intervention,” analysts at FBNQuest said, noting that offshore investor participation remained subdued.
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Foreign portfolio inflows rose modestly by 7 percent month on month to US$632 million, far below the US$3.5 billion recorded in October. Analysts attributed the slowdown to year-end risk aversion, as global investors typically reduce exposure and rebalance portfolios toward the close of the year.
Foreign direct investment, the smallest component of FX inflows, more than quadrupled to $50.1 million in December, rising 381.7 percent from $10.4 million in the previous month.
On the domestic side, inflows from exporters and importers increased 49 percent to US$683 million, while contributions from individuals surged 88 percent to US$275.3 million. Inflows from local corporates, however, declined 5 percent to US$420 million.
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The naira closed largely flat during the period, depreciating slightly by 0.1 percent to 1,419.71 per dollar at the official market, according to central bank data. The currency traded unchanged at around 1,490 per dollar on the parallel market.
Nigeria’s foreign reserves also edged higher, rising to US$45.64 billion as of January 7, from US$45.62 billion the previous day, bolstering the central bank’s capacity to intervene in currency markets.
CBN Governor Olayemi Cardoso said recent reforms, including the introduction of a Nigerian Foreign Exchange Code and a new electronic trading platform, had improved transparency and narrowed the gap between official and parallel market exchange rates.
Looking ahead, analysts said softer inflation expectations and a potential easing of monetary policy in 2026 could support renewed foreign investor interest, while a more dovish stance by the U.S. Federal Reserve may also lift capital flows into emerging markets.
