Nigerian banks significantly reduced their borrowing from the Central Bank of Nigeria (CBN) in April 2025, reflecting stronger liquidity in the banking sector. Borrowings through the CBN’s Standing Lending Facility (SLF) fell by 97.6% month-on-month to ₦380 billion—down from ₦16.5 trillion in March.
According to CBN data, commercial banks borrowed a total of ₦50.46 trillion via the SLF and Repo facilities in the first quarter of 2025, marking a 161.5% increase compared to ₦31.25 trillion in the same period last year.
The SLF allows banks to access short-term funds at a rate 5 percentage points above the Monetary Policy Rate (MPR), while Repo agreements involve the CBN temporarily purchasing securities from banks, with a commitment to resell them later at a premium.
In contrast, banks with excess funds can deposit them at the CBN through the Standing Deposit Facility (SDF), which pays interest at MPR minus 100 basis points.
Reflecting the more stable liquidity environment, banks’ SDF placements rose 3.08% in April to ₦16.7 trillion, up from ₦16.2 trillion in March. This continues a broader trend from the first quarter of 2025, when SDF placements surged by 957% quarter-on-quarter to ₦19.2 trillion—compared to just ₦1.82 trillion in Q1 2024.
The increase in SDF activity comes after the CBN adopted a unified interest structure for the facility, with all deposits now earning MPR minus 1%. With the current MPR at 27.5%, the effective SDF rate stands at 26.5%.
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