Nigerian banks have deposited an estimated N77.19 trillion with the Central Bank of Nigeria (CBN) in 19 days of business activities in September 2026. This move follows the push for overnight interest and a safe haven for excess liquidity. Banks use the Standing Deposit Facility (SDF) window to deposit excess cash with the CBN and borrow from the apex banking regulatory body through the Standing Lending Facility (SLF).
According to the CBN's financial data, the average amount deposited by banks in September 2026 stood at N4.06 trillion. In terms of lending, the CBN borrowed an estimated N920 billion from Nigerian banks during the period under review. The CBN data also revealed that Nigerian banks' deposits declined by 1.14% month-on-month (M-o-M) to N82.99 trillion in August 2026, compared to N83.96 trillion recorded in July 2026.
The 1.14% M-o-M decline in bank deposits can be attributed to the cut in the Monetary Policy Rate (MPR) to 26.50% in February 2026 from 27% in 2025, reducing Non-Performing Loans (NPLs), and seeking attractive interest overnight. This made it a preferred option for banks to earn risk-free returns. The September 22, 2026, outcome of the Monetary Policy Committee (MPC) of the CBN may further force banks to reduce access to the standing facilities window.
The MPC voted to reset the MPR at 23% and recalibrate the Standing Facilities corridor to +50/-300 basis points around the MPR. Consequently, the overnight rate on the SDF dropped to 20% from the previous 23%. CBN data revealed that SDF was at N89.3 trillion in June 2026, N87.13 trillion in May 2026, and N92.32 trillion in April 2026.
The numbers showed that banks' deposits in March 2026 were the highest, with about N128.92 trillion. In February 2026, deposits stood at N61.11 trillion, a 16.18% increase compared to N52.6 trillion deposited in January 2026. The statistics also showed that in eight months of 2026, banks have deposited an estimated N678.36 trillion, about a 610.58% year-on-year (YoY) increase over N95.47 trillion in the eight months of 2025.
Analysts at Cordros Research stated that the adjusted asymmetric corridor around the MPR aims to narrow the gap between the MPR and the lower bound. They explained that the adjustment should strengthen the transmission of policy decisions to short-term market rates and reinforce the MPR's signalling role.
The policy adjustment is expected to translate into lower market yields, improved liquidity, and reduced corporate financing costs. Continued macroeconomic stability, particularly in inflation and the exchange rate, will also remain important to investor sentiment. The CBN's move is expected to have a significant impact on the banking sector and the overall economy.
Key points
- Nigerian banks deposited N77.19 trillion with the CBN in 19 days.
- The overnight interest rate on the SDF dropped to 20% from 23%.
- The CBN's policy adjustment aims to strengthen the transmission of policy decisions to short-term market rates.
