Praia, Dec. 18, 2025 (Lusa) - Cabo Verde's net foreign reserves reached €1.02 billion, exceeding €1 billion for the first time, a figure considered "comfortable" by the central bank to ensure the stability of the currency against the euro.
On 11 December, net foreign reserves stood at €1.02 billion, a level considered comfortable and adequate for the preservation of the fixed exchange rate regime," i.e., a fixed exchange rate (110.265 escudos) against the euro, the Bank of Cabo Verde (BCV) announced in a statement.
According to the BCV, this is a "historic milestone" resulting from a combination of factors, namely monetary policy, strong tourism performance, increased foreign direct investment (FDI), and remittances from emigrants.
The central bank explained that official foreign reserves are foreign assets, including euros, dollars, yen, debt securities issued by other countries, and other liquid assets, which act as a kind of "savings" for the country, ensuring its ability to honour financial commitments and maintain confidence in the financial system.
In the monetary sector, the measures adopted as part of the normalisation process that began in May 2023, including the increase in reference interest rates, helped to reduce the interest rate differential with the euro area and reverse the trend of commercial banks accumulating liquid assets abroad.
In November, these holdings stood at €13 million, down €208 million from the previous November.
Tourism also contributed significantly to the strengthening of foreign reserves.
From January to September 2025, Cabo Verde received 806,169 foreign guests, 56,344 more than in the same period last year, generating net revenues of around €415 million, an increase of €35 million over the previous year.
The increase in FDI and remittances from emigrants "further strengthened" the country's external position, standing at €79 million and €200 million, respectively, in the same period.
The BCV assured that it will continue to monitor the evolution of foreign reserves and intervene whenever necessary to maintain a level compatible with the defence of the fixed exchange rate regime pegged to the euro and price stability.
RS/ADB // ADB.
Lusa
