EXCLUSIVE: Inflation Falls To 16.05% As CBN Reforms Boost Nigeria’s Reserves To Seven-Year-High Of $46.7bn

Nigeria’s battle against inflation and foreign exchange instability appears to be turning a corner, as fresh data obtained exclusively by THE WHISTLER showed that headline inflation dropped sharply to 16.05 per cent in October from 18.02 per cent in September 2025.

The figures, sourced from senior government officials with direct knowledge of the data, also reveal a broad-based easing across key inflation components.

Core inflation declined to 18.69 per cent from 19.53 per cent, while food inflation fell to 13.12 per cent, marking one of the steepest month-on-month moderations since the current inflationary cycle began.

But perhaps the biggest signal of Nigeria’s improving macroeconomic fundamentals is the significant jump in the country’s foreign exchange reserves, which have surged to $46.7bn, the highest level since 2019. The last time Nigeria’s reserves approached this threshold was August 13, 2018, when the reserves stood at $46.1bn.

Sources said the reserve build-up is the clearest evidence yet that the aggressive monetary and currency reforms championed by the Governor of the Central Bank of Nigeria (CBN), Mr Olayemi Cardoso, are beginning to bear fruit.

Since assuming office, Cardoso has dismantled multiple exchange windows, unified the FX market, and restored transparency to a system previously plagued by arbitrage and opacity. The result has been renewed confidence from foreign portfolio investors, many of whom had exited Nigeria during years of instability.

The CBN’s settlement of verified FX backlogs owed to airlines, manufacturers, and offshore investors also proved pivotal in rebuilding trust, an issue that had dogged the Nigerian market for nearly a decade.

Reforms within the International Money Transfer Operators (IMTOs) ecosystem, including more market-reflective pricing and faster settlement cycles, additionally boosted diaspora remittances.

At the same time, high interest rates maintained by the Monetary Policy Committee (MPC) have made naira-denominated assets more attractive, supporting increased capital inflows and further strengthening reserves.

Earlier this year, THE WHISTLER had reported that Moody’s Investors Service raised Nigeria’s long-term issuer rating from Caa1 to B3, citing strengthened external-financing conditions, improved FX liquidity, and early signs of macroeconomic stabilisation.

Weeks later, S&P Global Ratings followed with its own verdict, revising Nigeria’s sovereign outlook from Stable to Positive, signalling the possibility of a future upgrade.

The agency pointed to decisive monetary tightening, exchange rate liberalisation, settlement of verified FX backlogs, and improved reserves as evidence that the reform agenda is yielding measurable progress.

For a country long criticised for policy inconsistencies, the back-to-back upgrades mark a significant psychological and financial break from the past.

Nigeria’s reserves, which had fallen drastically over the years due to the oil price collapse, recession, COVID-19 shocks, and sustained speculative pressure on the naira, are now at levels last seen during the 2018 period of strong oil earnings and macroeconomic calm.

Findings by THE WHISLER showed that the rebound signals a dramatic reversal in FX liquidity management, one of the most contentious issues before Cardoso’s appointment.

The stronger reserve position, according to THE WHISTLER investigation, is already easing pressure on the naira and enhancing the CBN’s ability to intervene in the market, smoothen volatility, and maintain investor confidence.

Cardoso, during a recent closed-door engagement with financial sector leaders, had reaffirmed his long-term vision for FX stability.

“We are building a transparent, market-driven foreign exchange system that will restore investor confidence and support long-term economic growth,” he stated.

With inflation easing and reserves swelling, market analysts say the CBN may be entering its most successful policy phase since the beginning of the decade, though they caution that sustaining the gains will depend on continued discipline in fiscal and monetary coordination.