Banks borrowing from the Central Bank of Nigeria's Standing Lending Facility (SLF) have fallen by 76.4% month-on-month in July, according to the apex bank's financial data.

The banks’ deposits in the CBN Standing Deposit Facility (SDF) also grew by 270.7 percent month-on-month to N8.12 trillion from N2.19 trillion in July.

This data proves that banks are having idle funds in their systems but businesses are not able to access these funds because of the increase in borrowing rates as a result of the recent raise in the Monetary Policy Rate, MPR.

This is coming on the back of CBN’s newest increment in the rates for the SDF as part of its ongoing efforts to prevent banks from holding excess liquidity at the CBN and to promote increased lending activities.

The decision was detailed in a circular following the 296th Monetary Policy Committee (MPC) meeting, where the apex bank revised the Asymmetric Corridor around the Monetary Policy Rate (MPR) from +100/-300 basis points (bps) to +500/-100 bps in a bid to discourage banks from holding excess liquidity.

The CBN raised the SLF rate, which banks use to borrow short-term funds to 31.75 percent.