Excess liquidity drives banks’ CBN deposits to N83.95trn

Nigerian banks significantly increased their deposits with the Central Bank of Nigeria (CBN) in July 2026, signalling stronger liquidity across the financial system as reliance on the apex bank’s lending window declined sharply.

Latest financial data released by the CBN showed that deposits through the Standing Deposit Facility (SDF) rose to N83.95 trillion in July, representing a 670.2 per cent increase from N10.9 trillion recorded in the corresponding period of 2025.

Conversely, banks’ borrowing through the Standing Lending Facility (SLF) fell by 82 per cent year-on-year, dropping to N1.19 trillion from N6.63 trillion in July last year.

The SDF enables deposit money banks to place excess liquidity with the CBN, while the SLF serves as a short-term lending window through which banks obtain funds at an interest rate set above the Monetary Policy Rate (MPR). The apex bank also provides liquidity through repurchase (Repo) transactions backed by eligible securities.

The sharp rise in SDF deposits alongside the decline in SLF borrowing suggests banks had sufficient liquidity to meet funding needs without relying heavily on the CBN’s lending facilities.

The development comes weeks after the Monetary Policy Committee retained the Monetary Policy Rate at 26.5 per cent, while leaving other key monetary parameters unchanged.

The committee also maintained the asymmetric corridor around the MPR at +500/-450 basis points, retained the Cash Reserve Ratio at 45 per cent for commercial banks, 16 per cent for merchant banks, and sustained the 75 per cent CRR on non-Treasury Single Account public sector deposits.

The CBN’s decision to leave policy rates unchanged reflects its continued commitment to tight monetary measures aimed at containing inflation while maintaining stability in the financial system.