Nigerian business banks deposited a staggering N3.7 trillion into the Central Bank of Nigeria’s (CBN) Standing Deposit Facility (SDF) on December 24, signaling one of many highest liquidity surges in months.
That is based on monetary knowledge from the CBN masking December 22–24, 2025, which confirmed a pointy improve in idle fund placements simply forward of Christmas.
The spike got here regardless of the apex bank’s earlier liquidity mop-up via a N1.7 trillion Open Market Operation (OMO) on December 22, revealing persistent extra money within the monetary system.
What the information is saying
In line with CBN’s monetary information, bank placements within the SDF jumped from N2.47 trillion on December 23 to N3.67 trillion on December 24, a N1.2 trillion improve inside 24 hours.
- Moreover, banks’ opening balances on the CBN rose from N163 billion to N223 billion, reinforcing the concept business banks had been flushing with money heading into the festive weekend.
- Regardless of mopping up over N11.2 trillion in OMO payments since November and repaying N11.1 trillion, banks stay money heavy.
Analysts say the surge in liquidity can also be an indication of a cautious lending setting the place banks desire to lock funds in safe devices just like the SDF, which yields in a single day curiosity of round 22.5%, as an alternative of increasing credit score portfolios amid prevailing financial tightening.
Extra on the liquidity surge
The knowledge counsel the apex bank might be avoiding contemporary short-term debt issuances, to permit the market to recalibrate after intense OMO operations over the previous two months.
On December 23 alone, the CBN processed an OMO compensation value N1.14 trillion, a part of its bigger issuance-repayment cycle that noticed about N22.3 trillion in liquidity exercise in simply eight weeks.
Whereas cease charges throughout these OMO auctions ranged between 19% and 22%, the CBN has signaled a shift to passive liquidity administration—opting to make use of the SDF window reasonably than challenge new debt.
This method not directly helps financial tightening whereas minimizing the price of additional curiosity funds, which already neared N2 trillion for November–December auctions.
As 2025 winds down, trade observers counsel that the CBN might resume extra aggressive OMO operations in early 2026 to stabilize inflation, help FX markets, and presumably handle authorities financing necessities.
Why this matter
The huge deposit on the SDF displays rising unease throughout the banking sector concerning lending, in addition to the CBN’s evolving technique to manage liquidity with out always issuing new debt.
Excessive ranges of idle money may additionally point out restricted funding alternatives in the true economic system or warning amid macroeconomic uncertainties.
For buyers, it alerts a banking sector in wait-and-see mode and for policymakers, it factors to potential shifts in liquidity and inflation management methods heading into 2026.
What you need to know
- The Standing Deposit Facility (SDF) is the CBN’s software for absorbing extra liquidity by providing banks curiosity on in a single day deposits, at the moment round 22.5%.
- Its counterpart, the Standing Lending Facility (SLF), is used when banks must borrow short-term money, often at increased charges.
- The usage of the SDF has surged in current months; a transparent signal that liquidity is excessive whereas lending exercise stays weak.
- The CBN raised over N11.2 trillion in OMO payments between November and December 2025 and repaid nearly the identical quantity.
- Earlier Nairametrics protection has tracked the CBN’s aggressive liquidity administration stance.
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