Tony Chukwunyem 
The total amount of demand deposits in the banking system rose by 2.64 per cent, or N916.45 billion, to N35.62 trillion in November 2025, from N34.70 trillion in the preceding month, latest data released by the Central Bank of Nigeria (CBN) shows.
New Telegraph’s analysis of the money and credit statistics data recently released by the apex bank indicates that demand deposits maintained an upward trend in the last two months.
Specifically, the data shows that after dropping to N34.64 trillion in September 2025 from N34.93 trillion in the previous month, demand deposits increased to N34.70 trillion and N35.62 trillion in October and November respectively.
The CBN defines a demand deposit as, “money deposited into a bank account with funds that can be withdrawn ondemand at any time.” Thus, common examples of demand deposits include amounts in a current account or savings account.
Further analysis of the latest data released by the regulator shows that after generally maintaining a downward trajectory in Q2 and Q3 2025, demand deposits seem to be heading into 2026 in ascendancy.
According to analysts, the rebound in demand deposits in October and November, last year, was driven by factors such as economic growth, which boosts demand for transactional accounts, attractive interest rates offered by banks on deposits or on Treasury Bills, stability in the foreign exchange market and the increased competition for deposits among banks.
Interestingly, after a prolonged period of tightening, the Monetary Policy Committee (MPC) of the CBN, in the last week of September last year, cut the benchmark interest rate-the Monetary Policy Rate (MPR)- for the first time since 2020, a move, analysts said, resulted in the easing of financing constraints for businesses and households.
Indeed, commenting on the MPR cut at the time, analysts at Coronation Merchant Bank said: “At its 302nd MPC meeting, the Monetary Policy Rate (MPR) was cut by 50 bps to 27 per cent, while an asymmetric corridor of +250/-250 bps was maintained.
“We believe this shift to a more accommodative stance, after a prolonged period of tightening, should start to ease financing constraints for businesses and households, boosting credit-sensitive sectors such as manufacturing, construction, and real estate, which moderated in Q2.
“Financial services may also benefit from higher lending volumes despite narrower margins. Over the medium term, the growth impact will depend on how quickly banks transmit lower rates, the trajectory of inflation and exchange rate stability.”
However, experts note that while the growth in demand deposits reflects an increase in economic activity as well as a resilient financial sector, it also raises concerns about a surge in money supply which has the potential of fuelling inflation.
In fact, although the slowdown in inflation for seven consecutive months, to 16.05 per cent in October last year, had led analysts to predict that the CBN will further reduce interest rate at the November meeting of the MPC, the apex bank retained the MPR at 27 per cent.
CBN Governor, Olayemi Cardoso, who announced the MPC’s decision said the Committee voted by a majority, “to maintain the monetary policy stance,” adding that members were convinced that the economy required more time for earlier decisions to filter through.
Stakeholders saw the decision by the MPC to leave interest rates unchanged as evidence that the apex bank was sticking to its disinflation strategy.
