Borrowing by Nigerian banks from the Central Bank of Nigeria’s (CBN) Standing Lending Facility (SLF) fell by 89 per cent to N126 billion in August 2026 from N1.19 trillion in July.
The development indicates improved liquidity in the banking system, according to a report by Nairametrics.
The CBN operates short-term lending windows through which financial institutions can access funds, including the Standing Lending Facility and repurchase (Repo) arrangements.
Under the SLF, the apex bank provides overnight funds to eligible financial institutions at an interest rate set at 500 basis points above the Monetary Policy Rate (MPR).
The CBN also provides liquidity through Repo transactions, under which it purchases securities from banks with an agreement to sell them back at a specified date and price.
On the other hand, the CBN accepts deposits from commercial banks through its Standing Deposit Facility (SDF).
According to the apex bank’s financial data for August, deposits by banks under the SDF declined marginally by 1.14 per cent to N82.99 trillion from N83.95 trillion in July.
The decline in banks’ borrowing from the SLF occurred as the CBN retained the MPR at 26.5 per cent and maintained other monetary policy parameters.
The sharp reduction in reliance on the SLF suggests that banks had less need to obtain emergency or short-term liquidity from the apex bank during the month.
Improved liquidity conditions could reduce funding pressures on financial institutions and potentially support lower borrowing costs for businesses and individuals.
The development also highlights the importance of liquidity management in the banking system, as banks’ demand for central bank funding typically rises when available liquidity becomes tighter.
