Nigerian banks‘ deposits held at the Central Bank of Nigeria dropped sharply to ₦92.32 trillion in April 2026, according to fresh data from the apex bank a steep 28.4 per cent decline from the ₦128.9 trillion recorded in March.
The slide follows the Monetary Policy Committee’s decision to trim the Monetary Policy Rate from 27 per cent to 26.5 per cent, a move that has made the CBN’s Standing Deposit Facility (SDF) — a window banks use to earn risk-free overnight returns on surplus cash considerably less appealing.
With lower yields on offer at the central bank, many lenders appear to be rethinking where they park their excess funds, with analysts pointing to a gradual pivot toward lending opportunities in the wider economy, where returns may now be comparatively more attractive.
Deposit figures have been volatile across the year. Banks held ₦52.6 trillion at the CBN in January, rising to ₦61.11 trillion in February and surging to ₦128.9 trillion in March before the April drop. In total, cumulative deposits for the first four months of 2026 reached an estimated ₦334.95 trillion, reflecting a continued appetite for low-risk instruments despite economic headwinds.
On the borrowing side, banks drew just ₦2.2 trillion from the CBN through the Standing Lending Facility during the period a dramatic 94.9 per cent fall compared to ₦43.42 trillion borrowed in the same window a year earlier. Experts say this points to persistently cautious lending behaviour, driven by concerns over credit risk and a volatile macroeconomic environment.
Cordros Research noted that adjustments to the interest rate corridor — now pegged at +50 and -450 basis points around the MPR — have eased conditions across both the lending and deposit facilities, and said the shift is expected to support broader private sector credit growth.
Investment banker Tajudeen Olayinka explained the dynamic plainly: banks in uncertain times gravitate toward safety. “When there is so much uncertainty in the business environment, banks look for viable opportunities in prime borrowers. In the absence of these, they resort to short-term placements and the CBN window to hold liquidity,” he said.
He cautioned that global tensions and energy market volatility continue to influence monetary conditions, and warned that elevated interest rates could linger and weigh on economic growth.
Analysts broadly agree that while the rate cut signals an easing bias, the CBN is unlikely to move aggressively — balancing the need to stimulate lending against the ongoing challenge of reining in inflation.
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