Commercial banks significantly increased their deposits with the Central Bank of Nigeria (CBN) through its Standing Deposit Facility (SDF) in July 2026, signalling improved liquidity across the banking sector amid the apex bank’s tight monetary policy.
Data released by the CBN showed that deposits placed by banks under the SDF rose to ₦83.95 trillion in July, representing a 670.2 per cent increase from ₦10.9 trillion recorded in the corresponding period of 2025.
In contrast, banks sharply reduced their reliance on the CBN’s Standing Lending Facility (SLF), with borrowings declining by 82 per cent year-on-year to ₦1.19 trillion, down from ₦6.63 trillion in July last year.
The SDF enables deposit money banks to lodge excess funds with the central bank. At the same time, the SLF provides overnight financing to banks at an interest rate set at 500 basis points above the Monetary Policy Rate (MPR).
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The CBN also manages short-term liquidity through repurchase (Repo) operations, under which it purchases eligible securities from banks with an agreement that they will be repurchased at a later date.
The sharp rise in SDF deposits, alongside the steep decline in borrowing through the SLF, suggests that banks had ample liquidity during the period, reducing their dependence on short-term funding from the apex bank.
The development aligns with the CBN’s continued monetary tightening aimed at curbing inflation and safeguarding macroeconomic stability. At its latest Monetary Policy Committee (MPC) meeting, the apex bank retained the Monetary Policy Rate at 26.5 per cent, while keeping the asymmetric corridor at +500 and -450 basis points.
The committee also maintained the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks, 16 per cent for merchant banks, and 75 per cent for non-Treasury Single Account (Non-TSA) public sector deposits, underscoring its commitment to sustaining tight monetary conditions to rein in inflation and strengthen financial system stability.
