Nigeria’s banks have flooded the CBN’s Standing Deposit Facility with nearly ₦7 trillion in excess cash, highlighting a persistent liquidity glut the central bank is struggling to absorb.
Figures released by the CBN at the close of business on Thursday, March 12, 2026, reveal that deposit money banks (DMBs) parked a staggering N6.96 trillion at the SDF on Wednesday, March 11.
The pile eased only marginally to N6.69 trillion the following day, still hovering near the N7 trillion mark and marking one of the highest readings in recent memory.
The surge did not happen in isolation. A clear pattern of rapid liquidity build-up emerged earlier in the week: deposits stood at N5.27 trillion on Tuesday, March 10, and N5.20 trillion on Sunday, March 9. In just three days, banks funnelled an extra N1.5 trillion-plus into the facility, choosing the safety of overnight interest from the CBN over rushing into fresh lending.
Analysts point to one dominant trigger: a wave of maturing government securities that has poured cash back into the banking system. Primary-market repayments—essentially the redemption of Treasury bills and bonds totaled roughly N1.5 trillion over the period.
On Thursday alone, repayments hit N711.55 billion, dwarfing the N481.61 million recorded the previous day and the N266.46 million on March 10. Every kobo repaid flows straight to banks and institutional investors, instantly swelling their liquidity positions.
Yet the CBN has not been idle. To offset the deluge, the government ramped up fresh borrowing through the primary market. Auction settlements reached N933.92 billion on both March 11 and March 12—a deliberate liquidity-absorbing exercise that partially drained the system. Even so, the SDF numbers make it clear that the mop-up operation fell short of fully neutralizing the inflow.
Further evidence of the shifting landscape appears in banks’ opening balances at the CBN. These dropped steadily from N113.15 billion on March 10 to N93.40 billion on March 11 and then to N77.23 billion by March 12. The decline suggests institutions were actively redeploying cash, some into the government securities they had just bought, the rest into the SDF itself.
For the banking sector, the message is unmistakable: excess liquidity persists despite aggressive CBN intervention. Rather than extending credit to a still-cautious economy, lenders continue to treat the SDF as a low-risk parking lot, earning modest overnight returns while waiting for clearer signals on rates, inflation, and lending opportunities.
The development comes against a backdrop of the CBN’s broader liquidity-management toolkit. The Standing Deposit Facility, Open Market Operations, and Treasury bill auctions have all been deployed in recent months to keep money-market rates stable and prevent the kind of runaway liquidity that could stoke inflationary pressures.
Market watchers will now be eyeing Friday’s figures and next week’s auction calendar. With repayments continuing and fresh issuance already in the pipeline, the tug-of-war between liquidity creation and absorption is far from over.
For now, however, Nigeria’s banks are signalling loud and clear: there is still far more cash sloshing around the system than they are ready or willing to lend out.
WHAT YOU SHOULD KNOW
Nigeria’s banking system remains awash with excess liquidity, as deposit money banks parked nearly ₦7 trillion in the CBN’s Standing Deposit Facility on March 11–12, 2026, one of the highest levels recorded recently.
Massive repayments of maturing government securities (around ₦1.5 trillion in just days) injected huge amounts of cash into the system, and even aggressive new government borrowing could not fully absorb the surplus, leaving banks still preferring to park funds safely at the CBN rather than lend them out.
