Banks’ CBN deposits rise to N6.28tn amid surplus liquidity

Nigerian banks’ deposits with the Central Bank of Nigeria’s Standing Deposit Facility rose to approximately N6.278tn on 29 September, highlighting the volume of liquidity available in the banking system, according to CBN financial market data. The balance increased from N6.014tn on the previous day, representing a rise of about N264bn in 24 hours. It was also about N379bn higher than the N5.899tn recorded on 25 September.

The increase came as the CBN conducted another Open Market Operations auction, offering N2.5tn in securities. Existing OMO instruments worth N2.433tn matured and became due for repayment on the same day, leaving the new offer about N66.8bn above the amount returning to investors. The auction included N500bn of 147-day bills, N1tn of 182-day bills and N1tn of 266-day bills.

The securities are scheduled to mature between February and June 2027, with the longest-tenor instrument extending the CBN’s liquidity operations into the second quarter of next year. Financial analyst and economist Nonso Iheoma said the rising SDF balance suggested that banks had sufficient funds available for placement with the central bank, even as the CBN continued providing instruments for investors to deploy liquidity. Banks’ opening balances fluctuated during the period, reaching N131.82bn on 29 September, compared with N277.74bn on 28 September.

Earlier in September, four OMO auctions attracted about N20.58tn in bids against a combined offer of N3.9tn. The CBN allotted approximately N12.823tn. September subscriptions exceeded the N18.72tn recorded in August after the CBN widened access to OMO securities to individuals, companies and non-bank financial institutions through deposit money banks.

Despite demand, accepted rates on longer-tenor instruments fell from about 18.99 per cent at the start of September to 17.29 per cent at the 24 September auction.