Nigerian Banks Witness Sharp Decline in CBN Borrowing Amid Liquidity Surge

The article discusses a significant 28.2% drop in Nigerian banks' borrowing from the Central Bank of Nigeria (CBN) in August 2025, amounting to N2.9 trillion. This decline is attributed to excess liquidity in the financial sector, driven by factors like increased Federation Accounts Allocation Committee (FAAC) disbursements.

Banks have been utilizing CBN's lending and deposit facilities to manage their cash reserves. The data indicates a shift in the financial landscape, with a notable decrease in credit accessed by banks in comparison to the previous year.

The rise in broad money supply (M2) further underscores the liquidity challenges faced by financial institutions in Nigeria.