The amount used by deposit money banks (DMBs) in the country in settling Letter of Credit (LC) fell by 9.15 per cent, or $79.90 million, to $793.18 million in 2025, compared with $873.07 million in the preceding year, according to the Central Bank of Nigeria’s (CBN) latest data on international payments.
New Telegraph’s analysis of the data shows that LC payments amounted to $64.55 million in January 2025; $95.59 million in February; $43.53 million in March; $64.29 million in April; $99.33 million in May and $87.34 million in June.
Also, LC payments gulped $81.34 million in July 2025; $69.04 million in August, $35.21million in September; $67.50 million in October; $9.97 million in November and $75.49 million in December. In addition, the data shows that the amount used in settling LC stood at $41.05 million in January 2026. A Letter of Credit (LC), also known as a documentary credit, is a mode of payment used for the importation of visible goods.
Typically, it is a letter from a bank guaranteeing that a buyer’s (importer) payment to a seller (exporter) will be received on time and for the correct amount, upon presentation of stipulated documents that conform to the terms and conditions of the documentary credit.
Further analysis of the CBN’s data on international payments indicates that the total amount used in settling LC fell sharply by 58.32 per cent, or $214.05 million, to $152.96 million in Q4’25 compared with the $367.01 million recorded in the corresponding period of the preceding year.
Interestingly, the significant decline was recorded in LC payments in 2025, compared with 2024, despite increased access to and availability of foreign exchange, occasioned by foreign exchange reforms introduced by the CBN in the last two years.
New Telegraph reports that during the post-Monetary Policy Committee (MPC) press briefing held on February 26, the CBN Governor, Mr. Olayemi Cardoso, announced that the country’s gross external reserves stood at $50.45 billion as of February 16, 2026, which, according to him, are sufficient to cover approximately 9.68 months of imports for goods and services.
Also, in a statement issued a fortnight ago, he revealed that Nigeria’s net foreign exchange reserves rose sharply by 772 per cent in two years, climbing from $3.99 billion at the end of 2023 to $34.80 billion as of December 2025.
