The Central Bank of Nigeria has increased its dollar sales to stabilize the foreign exchange market amid declining inflows from key sources.

In August 2025, the CBN sold $574 million, a 76 per cent increase from $326 million in July.

Total foreign exchange inflows into Nigeria’s market fell by 12 per cent month-on-month to $3.4 billion, down from $3.8 billion in July. The decline was largely due to a sharp pullback in foreign portfolio inflows, which dropped to $1.1 billion from $1.7 billion in the previous month, a 35 per cent contraction.

Despite the decline, foreign portfolio inflows remained the single largest source of foreign exchange liquidity, contributing approximately 86 per cent of total foreign-sourced foreign exchange and 32 per cent of overall inflows.

Fixed-income instruments accounted for the majority of capital flows, attracting $951 million, while equity-related inflows stood at $139 million. Foreign direct investment flows remained depressed, plunging to $22 million from $49 million in July.

On the domestic front, foreign exchange inflows from non-bank corporates declined sharply by 28% month-on-month to $826 million, while export receipts increased modestly to $654 million from $583 million the previous month.

Analysts stress the importance of scaling up Nigeria’s domestic export capacity to ensure long-term improvements in foreign exchange earnings.

Despite near-term volatility in foreign exchange inflows, FBNQuest analysts remain cautiously optimistic, noting that overall foreign exchange liquidity trends in 2025 point to an improvement compared to the previous year.

The CBN’s stepped-up interventions, combined with targeted efforts to boost non-oil exports and attract more stable sources of foreign exchange, are expected to support market stability.

In the foreign exchange market, the naira weakened by N9.88 against the dollar, depreciating by 0.7% to N1,494.01 compared to N1,484.13 on the previous day. Nigeria’s external reserves climbed to $41.89 billion, representing a 2.27% increase compared to $40.96 billion recorded on August 18, 2025.

CBN Governor Olayemi Cardoso revealed that inflows from Nigerians in the diaspora have tripled in recent months, climbing from $250 million to $600 million monthly, and projected that by next year, diaspora remittances could double again to reach $1 billion per month.

“As far as we are concerned, we have done everything to enable that to happen,” Cardoso said.