Nigeria’s external reserves now $40.11bn —CBN governor

•CBN retains all key monetary policy parameters, keeps interest rate at 27.50%
•LCCI says 27.5% interest rate still a burden on businesses •Calls for targeted interventions
•CBN governor says eight banks fully met recapitalisation requirements

Nigeria’s external reserve has risen to $40.11 billion as of July 18, 2025, making it the highest level recorded since November 2024 when it hit $40.11 billion

The $40.11 billion reserve level representing approximately 9.5 months of import cover, signals a significant boost to country’s foreign currency buffer.

This was disclosed by the Central Bank of Nigeria (CBN) Governor Olayemi Cardoso on Tuesday while briefing journalists on the outcome of the 301st Monetary Policy Committee’s (MPC) meeting in Abuja.

Cardoso explained that the rise in foreign reserve marked a significant rebound in Nigeria’s foreign currency buffers amid ongoing efforts to stabilize the exchange rate and rebuild investor confidence.

He announced that the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) decided to retain all key monetary policy parameters during the meeting, making it the seventh consecutive time the MPC would retain the rates.

According to him, the MPC decided to retain the Monetary Policy Rate (MPR) at 27.50 percent, the asymmetric corridor around the MPR at +500/-100 basis points, the Cash Reserve Ratio (CRR), remains at 50 percent for Deposit Money Banks and 16 percent for Merchant Banks, while the Liquidity Ratio (LR) remains the same at 30 percent.

Cardoso said the decision was taken in a bid to sustain the momentum of disinflation and sufficiently contain the inflationary pressure.

“This decision was premised on the need to sustain the momentum of disinflation and sufficiently contain price pressures. Maintaining the current policy stance will continue to address the existing and emerging inflationary pressure. The MPC will continue to undertake rigorous assessment of economic conditions, price development and outlook to inform future policy decisions,” Cardoso stated.

He also pointed out that eight deposit money banks (DMBs) in the country have met the recapitalisation requirements set by the CBN, while others are making progress in meeting the requirements.

The CBN Governor said: “The MPC noted that eight (8) banks have fully met the recapitalisation requirements, while others are making progress towards meeting the deadline. The Committee thus, urged the Management of the Bank to sustain its oversight of the banking system to ensure continued resilience, safety and soundness of the financial system”.

Cardoso explained that before arriving at its decisions, the Committee acknowledged the decline in headline inflation in June 2025, the third consecutive month of deceleration.

He said: “This was largely driven by the moderation in energy prices and stability in the foreign exchange market. Despite these positive developments, Members observed the uptick in month-on-month headline inflation, suggesting the persistence of underlying price pressures. The continued global uncertainties associated with the tariff wars and geopolitical tensions could further exacerbate supply chain disruption and exert pressure on the prices of imported items.

“Members also noted the continued stability in the banking system, evidenced by the stable Financial Soundness Indicators (FSIs) which would further be supported by the ongoing banking recapitalisation exercise.”

Meanwhile, the Lagos Chamber of Commerce and Industry (LCCI) has called for a reduction in Monetary Policy Rate (MPR), noting that the current 27.50 per cent interest rate remains a ‘depressing’ burden on businesses.

The Chamber, in a statement issued by its Director General, Dr. Chinyere Almona, on Tuesday, also called for targeted interventions from the apex bank to boost the economy’s growth sectors like agriculture, power and infrastructure.

While acknowledging the current reforms have started having some impact on stabilising the exchange rates, easing headline inflation, and increasing government revenue, the Chamber however believed there is the need for the committee to strike a careful balance between preserving macroeconomic stability and supporting economic recovery.

This, it stated, has become imperative in the light of the extension of the capital expenditure component of the 2024 federal budget to December 2025.

The Chamber noted that while headline inflation declined marginally to 22.22 per cent in June from 22.79 per cent in May, the rate still remains significantly above the Central Bank’s target.

“Nigerian businesses and households continue to grapple with high operating and living costs, increasing the cost of credit.

“In our view, rate hikes alone cannot curb inflation. The Committee must recommend to the CBN that targeted interventions be provided to boost our growth sectors like agriculture, power, and infrastructure.

“We recognise that the current interest rate environment is tight, making access to credit above the affordability of small businesses, and the private sector is being crowded out of funding,” it stated.

LCCI,  therefore, urged CBN to complement its conventional policy tools with targeted, non-cash measures in the form of concessionary interest rates to small businesses.

The Chamber noted that a coordinated approach with fiscal authorities remains essential to resolving key drivers of inflation such as insecurity, infrastructure deficits, and disruptions in food supply chains.

On support for the real sector,  the Chamber called for strategic, market-oriented actions, such as: market-driven reforms that promote price stability by stimulating production and investment in the real economy.

It also stressed the imperatives of strengthening development finance interventions, through concessional funding to high-impact sectors like manufacturing, agriculture, renewable energy, and power.

Besides, the Chamber called for enhanced transparency in lending practices to ensure fairness in borrowing costs, and to also stop banks from imposing excessive margins over the MPR.

On the preparation for a new tax system coming with new rates and administration, it advised that the fight against inflation is sustained,  with managed rate cuts, before the end of the year.

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