Nigeria’s banking system liquidity surged to N8.06 trillion as banks increased deposits at the Central Bank of Nigeria’s Standing Deposit Facility (SDF), reflecting a sharp rise in excess cash in the financial system.
According to financial data published by the Central Bank of Nigeria (CBN), the figure was recorded at the close of a three-day trading window ending Wednesday, March 18.
The development follows a shortened trading week due to public holidays on Thursday and Friday, with liquidity conditions tightening the regulator’s grip on monetary control amid a growing cash surplus.
What the data is saying
Banks significantly increased their deposits at the CBN’s Standing Deposit Facility over the three-day period, highlighting a surge in system-wide liquidity.
The data shows a strong day-on-day and week-on-week increase in excess reserves held by financial institutions.
- Banks parked N8.06 trillion at the SDF, representing a N1.39 trillion increase from N6.67 trillion recorded the previous day.
- Opening balances of banks and discount houses rose from N103.66 billion on March 16 to N120.60 billion by March 18.
- Liquidity injections, including Open Market Operations and primary market repayments, totalled N926.30 billion within the three-day period.
- Compared to March 6–10, when repayments exceeded N1.75 trillion, largely driven by a single N1.69 trillion maturity, the March 16–18 inflows were more evenly distributed.
This steady inflow pattern drove a cumulative liquidity build-up, pushing SDF balances beyond N8 trillion, significantly higher than the N5.20 trillion to N5.65 trillion range observed in the prior week.
More insights
A breakdown of inflows shows that repayments from maturing instruments played a central role in boosting liquidity across the banking system.
These repayments returned previously locked funds into banks’ balance sheets, accelerating the cash surplus.
- A total of N926 billion was injected into the system between March 16 and 18 through Open Market Operations and primary market maturities.
- The largest inflow occurred on March 17, with N785.75 billion from OMO maturities and N83.60 billion from primary market repayments.
- Additional inflows included N56.95 billion on March 18 and N711.47 million on March 16.
The sustained inflow pattern across the three days created a compounding effect on liquidity, significantly elevating cash levels within the banking sector.
What you should know
Recent data indicate that the current liquidity surge marks a significant escalation compared to previous months, underscoring the persistence of excess cash in the system despite regulatory efforts.
- In February 2026, SDF placements peaked at approximately N4.26 trillion during mid-month liquidity surges.
- During that period, about N3.57 trillion was sterilised in three days, yet banks still maintained daily SDF balances close to N3 trillion.
- The current N8.06 trillion level is more than double February’s peak, signalling a stronger and more sustained liquidity glut.
This sharp increase highlights intensifying excess liquidity conditions in Nigeria’s banking system, posing ongoing challenges for the CBN’s monetary management efforts.
