Bank Liquidity Surges As Deposits With CBN Hit ₦2.62 Trillion

By OBIOMA TORI

NIGERIAN banks significantly increased their deposits with the Central Bank of Nigeria (CBN) last week, with balances rising from ₦2.28 trillion on Wednesday to ₦2.62 trillion by Friday — a ₦340 billion surge within three days.

Data from FMDQ showed that deposit money banks (DMBs) preferred placing excess funds at the CBN’s Standing Deposit Facility (SDF) rather than borrowing through its Standing Lending Facility (SLF), as overnight lending rates reached 24.8 percent by week’s end.

The trend reflected improved system liquidity, as the opening balances of banks and discount houses — representing liquid cash available for transactions — climbed to ₦637.59 billion on 24 October, up from ₦522.09 billion the previous day, reversing midweek liquidity strains that saw balances plunge to ₦192.65 billion.

SDF placements also spiked to ₦1.75 trillion earlier in the week from ₦906 billion, while SLF borrowings fell to ₦137 billion on Friday after hitting ₦275 billion midweek — an indication that liquidity conditions had eased across the banking system.

Market analysts say the shift underscores banks’ cautious lending stance amid high benchmark rates and tighter monetary conditions, even as overall liquidity improved heading into the final week of October.