Banks’ CBN deposits rise above N6 trillion after N2.4 trillion OMO repayment

Banks’ net placements at the Central Bank of Nigeria’s (CBN) Standing Deposit Facility (SDF) rose above N6 trillion following a N2.41 trillion Open Market Operations (OMO) repayment, with deposits remaining above that level for three consecutive days of the week ended Friday, October 16, 2026.

This is according to the CBN’s daily banking system liquidity reports covering October 13 to 16, 2026, which recorded a sharp increase in SDF activity immediately after the securities repayment, which released cash into the banking system.

Net SDF activity climbed from approximately N3.86 trillion on October 13 to N6.08 trillion on October 16, representing an increase of N2.22 trillion, or 57.65%, over the four-day period.

SDF Placements cross N6 trillion:

The CBN recorded OMO repayments totalling N2.408 trillion on October 13, representing the largest securities repayment during the period. It was also the only OMO repayment recorded across the four days, with no new OMO sales reported.

• The increase in banks’ deposit placements became evident on October 14, when net SDF activity rose by approximately N2.21 trillion, or 57.18%, to N6.065 trillion.
• Net SDF activity stood at approximately N3.86 trillion on October 13, before the sharp increase recorded the following day.
• Placements increased to N6.065 trillion on October 14, equivalent to a rise of about 91.6% of the previous day’s OMO repayment.
• SDF activity declined marginally by N20.76 billion to N6.044 trillion on October 15.

Deposits subsequently increased by N38.70 billion to N6.083 trillion on October 16, the highest reading in the four-day series.

The figures show that banks maintained elevated placements at the CBN after the initial increase, rather than withdrawing the funds immediately, suggesting that the OMO maturities may have triggered placements in the SDF.

Treasury Bill sales absorb limited liquidity:

Government securities sales absorbed only part of the liquidity released through OMO repayments during the period. The CBN reported primary-market securities sales of N269.06 billion, all recorded on October 15.

• The amount is exactly equal to the allotment from the October 14 Treasury bill auction, when subscriptions reached approximately N1.032 trillion, but the DMO allotted only N269.06 billion rejecting approximately 74% of total subscriptions.
• Primary-market securities sales totalled N269.06 billion during the four-day period.
• Primary-market repayments amounted to N109.96 billion, reducing net absorption from those transactions to N159.10 billion.
• OMO repayments totalled N2.408 trillion, with no corresponding new OMO sales reported.
• Combining the recorded OMO and primary-market transactions produced a net securities-related liquidity release of approximately N2.25 trillion.

The figures indicate that new Treasury bill sales offset only a relatively small portion of the liquidity released through maturing securities.

Although the October 14 auction attracted subscriptions exceeding N1 trillion, bids that were not allotted did not result in equivalent cash withdrawals from the banking system.

Consequently, the volume of investor demand was substantially higher than the amount absorbed through the auction.

The net securities-related release of approximately N2.25 trillion was close to the N2.22 trillion increase in SDF activity, but the similarity does not establish that the same funds moved between the two accounts.

Banks maintain elevated CBN deposits:

Banks’ opening balances changed only marginally over the four days despite the substantial securities repayments and increased SDF placements. Opening balances rose from N195.08 billion on October 13 to N234.89 billion on October 14 before declining to N198.32 billion by October 16.

The overall increase in opening balances was approximately N3.24 billion, or 1.66%, compared with the much larger movement recorded in SDF activity.

• Opening balances stood at N199.41 billion on October 15 before easing to N198.32 billion on October 16.
• Net SDF activity remained above N6 trillion from October 14 through October 16.
• The Standing Deposit Facility allows banks to place surplus funds with the CBN and earn interest, making it one of the apex bank’s tools for managing short-term liquidity.

The combination of substantial SDF placements without any reported borrowing from the lending window (SLF) suggests that banks were placing funds rather than drawing on the CBN for short-term financing.