Banks’ deposit placements with the Central Bank of Nigeria (CBN) rose steadily final week from N2.28 trillion on Wednesday to N2.55 trillion on Thursday earlier than hitting N2.62 trillion on the shut of enterprise on Friday, October 24.
Lenders deposit extra money at CBN’s Standing Deposit Facility (SDF), which the apex bank lends out to any banks via its Standing Lending Facility (SLF) window to fulfill essential in a single day obligations with an In a single day rate of interest as excessive as 24.8% as of final Friday, based on FMDQ.
Nairametrics’ evaluation of CBN’s monetary information throughout the week below overview confirmed that deposit cash banks (DMBs) deposited extra cash with the CBN than they borrowed.
The opening balances of banks and low cost homes (which replicate the quantity of liquid money the lenders reserved for banking transactions) jumped to N637.59 billion on Friday, October 24, 2025, from N522.09 billion the day gone by as market liquidity soared via the week.
The large enchancment contrasted sharply with mid-week pressures that noticed balances plunge to N192.65 billion on Wednesday. Sellers defined that whereas money circumstances improved, lending urge for food within the interbank market remained subdued on account of elevated benchmark charges.
The same sample performed out earlier within the week. On Tuesday, October 21, SDF placements ballooned to N1.75 trillion from N906.09 billion the earlier enterprise day. Analysts pointed to excessive credit score danger considerations and a desire for the security of the regulator window fairly than lending into the true sector.
CBN lending assist moderates as liquidity pressures ease
Whereas banks eagerly positioned extra funds with the apex bank, borrowing from the CBN slowed as pressures within the interbank market relaxed. Standing Lending Facility (SLF) requests settled at N137.10 billion solely on Friday after surging to N275 billion on Wednesday. The drop signaled a restoration in liquidity circumstances and a extra snug money stance heading into the ultimate week of the month.
Earlier within the week, SLF demand remained comparatively excessive at N235 billion on October 21, barely easing from N260.50 billion the day gone by.
That blended habits confirmed that though system liquidity was strengthening, some establishments nonetheless required in a single day assist to rebalance their books.
No repo or reverse-repo transactions had been recorded all through the week, indicating that the regulator didn’t must deploy extra liquidity-management instruments past its standing services.
OMO operations, authorities securities form money distribution
Liquidity actions throughout the overview interval had been additionally pushed by major market interventions and OMO operations. The CBN returned to the market with N827 billion in OMO invoice gross sales on October 21, after a no-sale session the day gone by. The intervention remained markedly under the N2.12 trillion offered on October 17, signaling a softer sterilization posture.
Authorities securities issuance and reimbursement flows supplied extra liquidity swings. On October 23, the market noticed N391.59 billion in NTB and bond issuances, whereas redemptions of N378.00 billion the identical day boosted system liquidity.
With no recent issuance or repayments recorded on Friday, sellers stated residual liquidity from Thursday’s flows helped gas the robust money setting.
Rate of interest watchers imagine sustained liquidity inflows may place delicate downward strain on interbank charges if the pattern continues into the ultimate week of October.
The earlier week demonstrated a monetary system flush with liquidity however nonetheless wrestling with confidence, leaving the Central Bank to maintain balancing act between stability and credit score growth as year-end pressures draw close to.
Key takeaways from the week’s monetary system overview:
- System liquidity surged sharply as banks’ Opening Balances climbed as excessive as N637.59 billion on October 24 from mid-week lows of N192.65 billion.
- Standing Deposit Facility (SDF) placements peaked at N2.62 trillion on Friday.
- Demand for the CBN’s Standing Lending Facility (SLF) moderated to N137.10 billion from N275 billion earlier within the week, signaling lowered funding strain.
- The CBN performed N827 billion in OMO gross sales on October 21, under the N2.12 trillion issued on October 17, suggesting a extra reasonable liquidity sterilization strategy.
- Authorities securities redemptions of N378 billion and issuances of N391.59 billion contributed to improved market liquidity.
- Interbank market confidence remained cautious regardless of robust liquidity, influenced by elevated rates of interest and credit score danger considerations.
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