Nigerian commercial banks have seen a massive surge in their deposits with the monetary authority, with the latest data from Zoyols News revealing a staggering 670 percent increase. By July 2026, total deposits held within the Standing Deposit Facility skyrocketed to N83.95 trillion, a stark contrast to the N10.9 trillion recorded during the same month last year.
This unprecedented rise in deposits is accompanied by a significant cooling in demand for credit from the central regulator. Banks’ reliance on the Standing Lending Facility plummeted by 82 percent year-on-year, dropping from N6.63 trillion in July 2025 to just N1.19 trillion this July. These shifting figures point to a banking system currently awash with liquidity, as financial institutions move away from heavy borrowing and toward placing excess funds with the regulator.
The regulatory framework behind these movements remains complex. The authority typically accepts deposits through its Standing Deposit Facility while managing two primary short-term lending windows: the Standing Lending Facility and Repo lending. Through these channels, funds are accessed at rates significantly above the prevailing Monetary Policy Rate, or through securities-backed repurchase agreements designed to manage market volatility.
This recent shift occurs against a backdrop of firm monetary policy. The authorities recently chose to maintain the Monetary Policy Rate at 26.5 percent, while holding the Cash Reserve Ratio for commercial banks steady at 45 percent. By keeping these stringent measures in place, the regulator is clearly doubling down on its commitment to curb inflation, signaling that it intends to maintain tight control over the money supply despite the current liquidity glut seen across the sector.
