Nigerian Forex Inflows Jump 38% in December

December 2025 brought a welcome shift to Nigeria’s foreign exchange market. After weeks of tight liquidity and cautious trading, fresh data showed a strong rebound in dollar inflows that gave traders and businesses a rare moment of relief.

Foreign exchange inflows into the Nigerian market jumped by 38 percent month-on-month to $2.8 billion in December. This sharp rise followed a painful 67 percent drop recorded in November, when dollar supply tightened and market confidence weakened.

At the heart of the recovery was renewed intervention by the Central Bank of Nigeria (CBN). By stepping up dollar sales, the apex bank boosted liquidity and helped stabilize trading conditions during the final month of the year.

Figures from FMDQ revealed that total inflows rose across most supply sources. While not all segments improved, the overall direction marked a clear turnaround from the previous month’s slump.

The CBN played the most visible role in driving the rebound. Forex sales by the central bank climbed to $654 million in December, more than double the $318 million recorded in November. This increase alone changed the tone of the market and lifted short-term confidence among participants.

Analysts at FBN Quest linked the CBN’s stronger presence to weak offshore participation. According to them, foreign investors remained largely on the sidelines, forcing the apex bank to step in more actively to support liquidity.

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.

Beyond the CBN’s intervention, other sources also contributed to the improved inflow numbers. Foreign direct investment, though still the smallest segment, recorded the fastest growth. FDI more than doubled to $50.1 million in December, jumping by 381.7 percent from $10.4 million in the previous month.

Exporters and importers also played a key role in lifting supply. Their forex contributions rose by 49 percent to $683 million, reflecting stronger trade-related inflows. Individuals added further momentum, as their inflows surged by 88 percent to $275.3 million.

These gains helped offset weakness from domestic corporates. Inflows from local companies declined by five percent month-on-month to $420 million, making them the only major segment to record a drop in December.

Still, the overall picture pointed to a market that was regaining its footing. The combination of central bank intervention, higher trade flows, and increased individual participation created a more balanced supply environment than seen a month earlier.

Foreign portfolio investment, however, remained muted. Analysts explained that the year-end period often comes with lower risk appetite, as global investors focus on profit-taking and portfolio rebalancing rather than new commitments.

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.

Looking ahead, analysts see reasons for cautious optimism. Expectations of renewed investor activity in the coming months could strengthen momentum, especially if global conditions turn more supportive.

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.”

It’s not just a number,It signaled a momentary easing of pressure in a market that has faced persistent volatility. While challenges remain, the recovery in Nigerian forex inflows showed how policy action and market forces can align to restore confidence, even if only temporarily.