Nigeria's Central Bank Drives Inspiring 38% Surge in Dollar Inflows

Nigeria's foreign exchange market is showing promising signs of recovery, thanks to strategic interventions by the Central Bank of Nigeria that helped boost dollar inflows by an impressive 38 percent in December 2025. The encouraging surge brought total foreign exchange inflows to $2.8 billion, marking a significant turnaround after previous challenges.

The heartening recovery was primarily driven by the Central Bank's commitment to supporting market stability. The institution more than doubled its foreign exchange sales to $654 million in December, up from $318 million the previous month, demonstrating a proactive approach to maintaining healthy market liquidity. This decisive action reflects the bank's dedication to creating a stable economic environment for businesses and investors.

Multiple sources contributed to this positive momentum. Foreign direct investment showed particularly exciting growth, more than quadrupling to $50.1 million in December, representing a remarkable 381.7 percent increase. Domestic exporters and importers also played their part, with their contributions rising by 49 percent to $683 million, while individual contributions surged by an impressive 88 percent to $275.3 million.

The Ripple Effect of these improvements extends far beyond simple numbers. Central Bank Governor Olayemi Cardoso highlighted the transformative impact of recent reforms, including the introduction of the Nigerian Foreign Exchange Code and the Electronic Foreign Exchange Matching System. These innovations have brought unprecedented transparency and fairness to currency trading, narrowing the gap between official and parallel exchange rates from more than 60 percent to under 2 percent. This dramatic improvement represents a victory for honest market practices and creates a more trustworthy environment for all participants.

Nigeria's external reserves also showed positive movement, rising to $45.64 billion as of January 7, 2026. This increase, while modest, provides the Central Bank with greater capacity to maintain market stability and support the naira's value. The currency itself has remained relatively stable, with minimal fluctuations, reflecting the success of ongoing interventions.

Looking forward, analysts at FBNQuest express optimism about the months ahead. They anticipate renewed investor activity driven by attractive domestic opportunities and potentially supportive global conditions. The expectation of softer inflation could allow for more accommodative monetary policies in 2026, while a potentially dovish stance by the United States Federal Reserve might lift global risk appetite and encourage stronger capital flows into emerging markets like Nigeria.

The transformation in Nigeria's foreign exchange market represents more than just economic statistics. It demonstrates what committed leadership, smart reforms, and transparent systems can achieve. While challenges remain, the December rebound offers genuine hope that Nigeria's financial sector is building a stronger, more resilient foundation for sustainable growth. As foreign portfolio inflows are expected to strengthen in the coming months, there's every reason to believe that this positive trajectory will continue, benefiting businesses, investors, and ordinary Nigerians alike.