Central Bank of Nigeria sees rising liquidity as banks boost SDF deposits

Liquidity within the Nigerian banking system has strengthened significantly as deposit money banks increased placements into the Central Bank of Nigeria (CBN) Standing Deposit Facility (SDF) window. Net system liquidity rose to N5.98 trillion at the close of recent trading, up from N2.86 trillion the previous week. This increase was driven by over N7 trillion placed in the SDF alongside approximately N2.3 trillion in Open Market Operation (OMO) repayments.

Following the Monetary Policy Committee's decision to cut the monetary policy rate to 23%, money market rates have responded. The overnight rate on the SDF dropped to 20% from 23%. This policy recalibration has led to a broad-based compression across the Nigerian Interbank Offered Rate (NIBOR) curve, with declines seen in overnight, 1-month, 3-month, and 6-month rates.

Data indicates that in the first 19 days of September 2026, Nigerian banks deposited an estimated N77.19 trillion with the CBN. The average deposit amount for the month stood at N4.06 trillion, while the CBN provided approximately N920 billion in lending to banks during the same period.