Borrowing by Nigerian banks from the Central Bank of Nigeria’s Standing Lending Facility, SLF, dropped significantly by 89 per cent in August 2026, indicating improved liquidity within the banking system.
According to Vanguard, banks accessed N126 billion through the CBN’s Standing Lending Facility in August, compared with N1.19 trillion recorded in July 2026.
The CBN operates short-term funding windows for banks, including the Standing Lending Facility and Repo transactions. Through the SLF, the apex bank provides funds to financial institutions at an interest rate set at 500 basis points above the Monetary Policy Rate.
Under the Repo arrangement, the CBN provides liquidity by purchasing eligible securities from banks, with an agreement that the securities will be repurchased at an agreed date and price.
The apex bank also accepts deposits from financial institutions through its Standing Deposit Facility.
Data contained in the CBN’s latest Financial Data for August 2026 showed that banks’ deposits with the Standing Deposit Facility fell by 1.14 per cent, from N83.95 trillion in July to N82.99 trillion in August.
The decline in borrowing came after the CBN maintained the Monetary Policy Rate at 26.5 per cent, alongside other key monetary policy parameters.
The reduction in banks’ reliance on the SLF suggests improved liquidity conditions in the financial system and could contribute to lower borrowing costs for businesses and individuals if the trend continues.
Source: Vanguard
