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Banks cut their deposits with the Central Bank of Nigeria (CBN) through the Standing Deposit Facility (SDF) by N941.85 billion to N3.76 trillion on October 7, 2026, marking the largest single-day reduction since September 30.
CBN data showed that SDF placements fell from N4.70 trillion on October 6 to N3.76 trillion the following day.
The sharp decline comes after banks’ overnight deposits with the apex bank had risen to N4.86 trillion on October 5 and follows a period of elevated SDF placements in September.
The movement comes against the backdrop of the Monetary Policy Committee’s decision to cut the Monetary Policy Rate (MPR) by 350 basis points to 23% on September 22, while retaining key reserve requirements.
SDF balances fall below N4 trillion
The latest reduction brought banks’ SDF deposits below the N4 trillion mark after the balance had remained above that level through most of the recent period.
- SDF deposits stood at N4.86 trillion on October 5 before declining to N4.70 trillion on October 6.
- The balance then fell by N941.85 billion to N3.76 trillion on October 7.
- The latest reduction is the largest single-day cut since September 30, when SDF deposits fell from N6.28 trillion on September 29 to N4.55 trillion.
- The SDF is an overnight, non-collateralised liquidity-absorption tool used by central banks to manage excess cash in the banking system.
The latest data points to a substantial reduction in the amount of liquidity banks placed overnight with the CBN through the facility.
SDF balances retreat from September peak
Banks’ SDF placements had reached significantly higher levels in September, with the balance exceeding N6 trillion on several occasions before declining towards the end of the month.
- SDF deposits reached N7.34 trillion on September 23 and peaked at N7.52 trillion on September 24.
- The balance fell to N5.90 trillion on September 25 before rising to N6.01 trillion on September 28.
- Deposits stood at N6.28 trillion on September 29 before dropping to N4.55 trillion on September 30.
- The October 7 balance of N3.76 trillion is N3.76 trillion below the September 24 peak.
The data shows considerable swings in banks’ overnight placements with the CBN, with the balance moving sharply between higher and lower levels over individual trading days.
CBN policy rate now 23%
The movement in SDF deposits follows the CBN’s latest monetary-policy decision, which reduced the benchmark interest rate while leaving key reserve requirements unchanged.
The MPC reduced the MPR by 350 basis points to 23% on September 22, while resetting the policy corridor around the MPR at +50 basis points and -300 basis points.
- The CRR for commercial banks was retained at 45%.
- The CRR for merchant banks remained at 16%.
- The MPC maintained the 75% CRR on non-TSA public sector deposits.
The policy decision provides the latest monetary-policy context for the movement in banks’ liquidity placements with the CBN.
