Nigeria’s deposit money banks (DMBs) parked a substantial N1.61 trillion with the Central Bank of Nigeria’s (CBN) Standing Deposit Facility (SDF) between October 14 and 17, 2025, according to the latest CBN daily money market data.
The upward trend culminated on Friday, October 17, with banks placing N1.61 trillion in risk-free funds at the apex bank, up from N1.45 trillion recorded two days earlier. This surge was partly driven by a N481.33 billion repayment of Open Market Operations (OMO) securities on October 14, which injected fresh liquidity into the banking system.
Despite this massive liquidity injection, opening balances of banks and discount houses sharply declined during the period, signaling uneven cash distribution across the sector. While some large banks maintained ample reserves, others faced intermittent funding pressures.
The Standing Lending Facility (SLF) saw minimal activity, with only a modest N500 million borrowed on October 14, reflecting the cautious stance of banks amid policy tightening and exchange rate volatility.
At an overnight lending rate of 24.88%, many banks opted for the risk-free SDF option rather than extending credit, underscoring risk aversion within the financial system.
Analysts warn that while abundant liquidity offers short-term stability, the preference for safe placements over lending to productive sectors could slow credit growth and economic expansion if it persists.
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