Nigeria’s deposit money banks (DMBs) flooded the Central Bank of Nigeria’s (CBN) Standing Deposit Facility (SDF) with deposits of N1.6 trillion.
Between October 14 and 17, 2025, banks consistently parked massive funds at the apex bank, culminating in a robust N1.61 trillion in deposits on Friday, October 17.
Fresh data from the CBN’s daily money market reports show that banks’ placements in the SDF rose steadily over the week, peaking at N1,613,819.61 million (N1.61 trillion) on October 17, compared to N1,446,801.35 million (N1.45 trillion) on October 15.
Earlier in the week, the figure stood at N1,476,482.75 million (N1.48 trillion) on October 14, maintaining the upward increases that began in early October.
As of October 16, 2025 2025, Nigeria’s overnight lending rate (i.e. CBN’s standing lending facility rate) stood at 24.88% according to FMDQ market data, attractive enough for banks to dump excess cash with the CBN for risk-free returns, a trend that persisted over the week ended Friday, October 17, 2025, despite marginal daily decline in opening balances.
A key contributor to the liquidity surge was the N481.33 billion in OMO repayments on October 14, which injected fresh cash into the financial system.
However, the absence of new OMO issuances or primary market sales in subsequent days points to a deliberate CBN strategy to maintain liquidity balance without aggressive intervention.
Despite the robust deposits at the SDF, the Opening Balances of Banks and Discount Houses fell sharply across the observed period, pointing to uneven liquidity distribution within the system.
On October 17, opening balances dipped to N97.45 billion, down from N150.72 billion recorded a day earlier — a 35.3% decline.
Similarly, balances fell from N472.75 billion on October 13 to N196.01 billion on October 14, representing a 58.5% plunge.
These swings suggest that while a few large banks continue to command ample cash reserves, others experienced intermittent funding pressures.
The Standing Lending Facility (SLF), where banks borrow from the apex bank to meet short-term needs, remained largely inactive throughout the week, except for a modest N500 million recorded on October 14.
Meanwhile, the Primary Market Repayment (matured government securities) rose sharply from N358.74 million on Thursday, October 16, to N92.89 billion on Friday, October 17, as the authorities settled maturing securities.
Notably, there were no repo, reverse repo, or rediscounted bill transactions during the review period, signifying minimal interbank market activity. This subdued lending appetite mirrors the cautious tone of the entire banking system.
The consistent rise in SDF placements underscores a high-liquidity but risk-averse environment in Nigeria’s financial system.
As of October 17, over N1.6 trillion sat idle at the CBN, reflecting banks’ conservative stance in a period marked by policy tightening and exchange rate volatility.
As of October 17, over N1.6 trillion sat idle at the CBN, reflecting banks’ conservative stance in a period marked by policy tightening and exchange rate volatility.
Analysts note that while the abundance of liquidity provides short-term stability, it also highlights the weak transmission of funds to the productive sectors.
The preference for safe, risk-free placements over lending to businesses could slow credit expansion and hamper economic growth if sustained.