Commercial and merchant banks have borrowed a total of N8.2 trillion from the Central Bank of Nigeria (CBN) in the first 17 days of 2025 to manage liquidity challenges in the financial sector, according to fresh data from the apex bank.
This borrowing was part of efforts to address the liquidity issues in the banking system and to support lending to Nigeria’s real sector.
The amount borrowed in 2025 was significantly lower than the N131.42 trillion borrowed by banks during the same period in 2024, which marked a sharp increase compared to the N17.84 billion borrowed in 2023.
The drop in borrowing this year was linked to a reduction in customer deposits, which had been affected by increased spending during the festive season, resulting in cash shortages across the banks.
Data from the CBN revealed that at the end of the review period, bank deposits with the CBN stood at N6.69 trillion.
Banks access short-term liquidity from the CBN through the Standing Lending Facility (SLF) window, while excess liquidity can be deposited via the Standing Deposit Facility (SDF).
These facilities help banks meet their daily operational needs.
In 2024, bank borrowing peaked in March with N21.74 trillion, while the lowest borrowing amount of N2.9 trillion occurred in January of that year.
The interest rate on CBN borrowings stood at 32.50 percent, with the monetary policy rate (MPR) set at 26.75 percent.
Dr. Omolara Duke, Director of the Financial Markets Department at the CBN, clarified that banks could access borrowings at a rate of 31.75 percent when the MPR was 26.75 percent, with facilities available through the Scripless Securities Settlement System (S4) during specific operating hours.
Additionally, banks could utilize the Intraday Lending Facility (ILF) free of charge, provided the loans were repaid the same day.
