Nigerian banks have sharply reduced the funds they keep with the Central Bank of Nigeria (CBN), with deposits through the apex bank’s Standing Deposit Facility falling by 87 per cent to ₦1.22 trillion in October 2026.
The figure represents a significant drop from the ₦9.4 trillion recorded in September, according to the CBN’s financial data for the end of October.
Banks also reduced their borrowing from the apex bank, with loans accessed through the Standing Lending Facility declining by 98 per cent to ₦15 billion in October, compared with ₦920 billion in the previous month.
The sharp declines indicate that banks made considerably less use of the CBN’s short-term liquidity management facilities during the period.
The Standing Deposit Facility allows banks to deposit surplus funds with the CBN and earn interest, while the Standing Lending Facility provides short-term funding to banks facing liquidity shortages.
The development comes after the CBN reduced its Monetary Policy Rate from 26.5 per cent to 23 per cent. Following the adjustment, the Standing Lending Facility rate was lowered from 27 per cent to 23.5 per cent, while the Standing Deposit Facility rate fell from 22 per cent to 20 per cent.
The revised rates reduced both the cost of obtaining short-term funds from the apex bank and the returns banks earn on surplus deposits.
The changes could influence how banks allocate their available funds, potentially encouraging greater investment in lending and other opportunities rather than leaving substantial amounts with the CBN. However, the extent of any shift will depend on banks’ liquidity needs and the availability of viable lending opportunities.
The latest figures highlight a substantial change in banks’ use of the apex bank’s liquidity facilities following the recent adjustment to monetary policy rates.
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