Nigeria’s gross external reserves have climbed to $50.45 billion, the highest level recorded in 13 years, Governor of the Central Bank of Nigeria, Olayemi Cardoso, announced on Tuesday.
Speaking to journalists after the 304th Monetary Policy Committee (MPC) meeting in Abuja, Cardoso said the surge signals strengthening macroeconomic fundamentals and rising investor confidence in the country’s policy direction.
“Gross external reserves rose significantly to $50.45 billion as of February 16, 2026 — the highest in 13 years. This provides an import cover of 9.68 months for goods and services,” he stated.
What’s Driving the Increase
Cardoso attributed the improvement to a mix of favourable trade dynamics, a healthy current account surplus, and growth in non-oil exports.
He emphasised that renewed market confidence has been pivotal.
“We are seeing very positive signals in the way the macroeconomy is developing. Trade conditions have been favourable, the current account remains in surplus, and non-oil exports have strengthened,” Cardoso said.
“Underpinning all these, quite frankly, is market confidence. Without it, outcomes would remain significantly sub-optimised.”
The governor added that sustained engagement with international stakeholders and a commitment to transparency helped rebuild credibility.
“We have consistently told our story at international fora, made commitments, and ensured we stayed the course. That openness has engendered positive sentiment, and I believe that has paid off.”
Sustainability and Risks
Despite the upbeat outlook, Cardoso cautioned that vulnerabilities persist.
He highlighted risks such as global economic shocks, oil price volatility, fiscal pressures, and pre-election spending.
“There will always be risks to any outlook. Oil prices, for instance, remain subject to forecasts, not certainty,” he noted.
He warned that unrestrained political spending could threaten hard-won stability.
“Pre-election spending, if not properly contained, could destabilise the gains we have achieved. Fiscal deficits also require careful management.”
Cardoso stressed the importance of policy consistency.
“We must ensure discipline in policy formulation and avoid policy somersaults.”
Strongest Position Since 2013
The current reserves level marks Nigeria’s strongest external buffer since May 2013, when reserves stood at approximately $48.51 billion.
Data from the apex bank show that reserves closed 2025 at about $45.5 billion, rising from $40.8 billion at the start of the year, and have continued their upward trajectory into 2026.
The CBN had earlier projected reserves could reach roughly $51 billion by the end of 2026.
Interest Rate Cut
At the meeting, Cardoso also announced a monetary policy adjustment. The MPC reduced the Monetary Policy Rate (MPR) by 50 basis points to 26.50 per cent, down from 27 per cent.
“The committee decided to reduce the monetary policy rate by 50 basis points to 26.50 per cent,” he said, noting that the decision was unanimous.
Other key policy parameters were retained or adjusted:
- Liquidity Ratio: 30 per cent (retained)
- Standing Facilities Corridor: Adjusted to +50/-450 basis points around the MPR
- Cash Reserve Ratio (CRR):
- 45 per cent for commercial banks (retained)
- 16 per cent for merchant banks (retained)
- CRR on Non-TSA Public Sector Deposits: 75 per cent (retained)
Inflation Outlook Improving
Cardoso said the rate cut followed a balanced assessment of inflation risks, pointing to continued disinflation.
“The decision was premised on a balanced evaluation of risks, suggesting that the disinflation trajectory would continue,” he explained.
He cited exchange rate stability, improved food supply, and the lagged effects of earlier tightening measures as supportive factors.
“The committee noted the sustained deceleration in year-on-year headline inflation in January 2026 — marking the 11th consecutive month of decline.”
External Sector Stability Strengthens
Cardoso further noted that Nigeria’s balance of payments position has benefited from stronger export earnings and rising remittance inflows.
“These developments have reinforced stability in the external sector,” he said.
With reserves approaching projected targets and inflation easing, analysts say the focus will now shift to sustaining confidence, managing fiscal risks, and protecting the gains against external shocks.
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