Central Bank’s Intervention Lifts FX Inflows To $2.8bn In December

Foreign exchange inflows into the Nigerian market rebounded strongly in December 2025, rising by 38 per cent month-on-month to $2.8 billion, as increased dollar sales by the Central Bank of Nigeria (CBN) helped shore up market liquidity.

Data from FMDQ showed that total foreign exchange inflows into the foreign exchange market rose sharply by 38 per cent month-on-month to $2.8 billion in December 2025, an improvement over the 67 per cent decline recorded in the previous month.

The rebound was primarily driven by higher foreign exchange sales by the CBN, which increased overall dollar supply and improved trading conditions in December, providing temporary relief to the market and enhancing liquidity conditions during the period.

According to the data, apart from inflows from domestic corporates, which declined by five per cent month-on-month to $420 million, all other foreign exchange supply sources recorded improvements during the period.

Increased intervention by the Central Bank of Nigeria led to strong inflows.

CBN forex sales rose in December to $654 million, compared with $318 million sold in the previous month. FBN Quest analysts note that the CBN’s recent active presence, aimed at bolstering liquidity, can be explained by the subdued participation of offshore investors, whose inflows have remained minimal.

On the foreign inflow components, foreign direct investment, the smallest segment, more than doubled to $50.1 million in December, rising by 381.7 per cent from $10.4 million in the preceding month.

Additionally, forex contributions from exporters and importers, as well as individuals, contributed to the month-on-month rebound, increasing by 49 per cent and 88 per cent to $683 million and $275.3 million, respectively.

FBN Quest analysts noted that the relatively weak inflows from accretion of FPIs reflect a reduced risk appetite seen toward year-end, when foreign investors scale back deployable liquidity and focus more on profit-taking and portfolio rebalancing.

The analysts say they “expect renewed investor activity in the coming months, which should drive stronger momentum of inflows, supported by attractive domestic carry trade opportunities. Looking ahead, softer inflation expectations should allow for a more accommodative policy stance in 2026. Despite this shift, we expect offshore participation to remain steady, supported by the MPC’s gradual easing path and the relative attractiveness of Nigerian yields.

“Additionally, Nigeria’s investment appeal could be further supported by the Fed’s dovish policy stance in 2026, which could support an improvement in global investor risk appetite and encourage stronger foreign capital inflows into emerging markets.”