By NIyi Jacobs
Nigerian commercial banks deposited about ₦3.7 trillion in excess funds with the Central Bank of Nigeria (CBN) through its Standing Deposit Facility (SDF) on December 24, indicating one of the highest liquidity surges recorded in recent months.
Data from the CBN covering December 22 to 24, 2025, showed a sharp rise in idle cash placements by banks ahead of the Christmas holidays. The surge occurred despite the apex bank’s earlier effort to mop up liquidity through a ₦1.7 trillion Open Market Operation (OMO) conducted on December 22.
According to the data send by BusinessNg Newspaper, banks’ deposits in the SDF rose from ₦2.47 trillion on December 23 to ₦3.67 trillion on December 24, representing an increase of about ₦1.2 trillion within 24 hours. In the same period, banks’ opening balances with the CBN increased from ₦163 billion to ₦223 billion, further confirming strong liquidity levels in the banking system.
Analysts attribute the development to a cautious lending environment, with banks preferring to place funds in risk-free instruments such as the SDF, which offers overnight interest of about 22.5 percent, rather than expanding credit amid tight monetary conditions.
The data also suggest that the CBN may be easing back on issuing fresh short-term debt, allowing the market to stabilize after several weeks of aggressive OMO activities. On December 23 alone, the apex bank processed an OMO repayment of ₦1.14 trillion, part of liquidity transactions totaling about ₦22.3 trillion within eight weeks.
Industry observers note that the growing reliance on the SDF reflects both excess liquidity in the banking sector and weak lending appetite, while also highlighting the CBN’s evolving strategy of managing liquidity without incurring additional interest costs from frequent debt issuances.
As 2025 draws to a close, analysts expect the CBN to possibly return to more active liquidity management in early 2026 to rein in inflation, stabilize the foreign exchange market, and address government financing needs.
