Banks’ deposit with the Central Bank of Nigeria, CBN, in form of Standing Deposit (SDF) grew by 395.8 percent, YoY, to N198.08 trillion in the first ten months of the year (10m’25) from N39.95 trillion in the corresponding period of 2024 (10m’24), reflecting excess liquidity in the banking system.

Trend analysis showed that banks’ deposits in SDF rose sharply by 158.4 percent Quarter-on-Quarter (QoQ) to N49.68 trillion in the second quarter of 2025 (Q2’25) from N19.22 trillion in Q1’25.

In Q3 ’25, banks deposited N77.23 trillion, up by 55.4 percent. In October, banks’ deposits stood at N51.95 trillion, highest in a month, up by 2.4 percent from N50.73 trillion in September.

The continuous strong patronage of the SDF reflects the effect of the CBN’s shift to a single-tier remuneration structure for the SDF last year.

The CBN has two short term lending windows for banks; the Standing Lending Facility (SLF) and Repo lending.

It lends money to banks through the SLF at interest rate of 500 bps above the Monetary Policy Rate (MPR), and it also lends money to banks through Repurchase (Repo) arrangement, which involves the purchase of banks’ securities with the agreement to sell back at a specific date and usually for a higher price.

On the other hand, the CBN accepts deposits from banks through its Standing Deposit Facility (SDF) and pays an interest rate of MPR minus 100 bps.

But banks’ borrowings through the CBN’s SLF declined by 22.2 per cent YoY to N70.37 trillion in the first ten months of the year (10m’25) from N90.48 trillion in 10m’24.

However, in October, banks’ borrowings grew by 208.9 percent to N995.5 billion from N322 million in September, which was the lowest value borrowed during the review period.

The decline in banks’ borrowing from the CBN reflects liquidity constraints in the interbank money market.