Nigerian commercial banks deposited a record N3.7 trillion with the Central Bank of Nigeria (CBN) through its Standing Deposit Facility (SDF) on December 24, reflecting one of the strongest liquidity surges in recent months.
CBN data covering December 22–24, 2025, show that SDF placements jumped sharply from N2.47 trillion on December 23 to N3.67 trillion on Christmas Eve—an increase of about N1.2 trillion within 24 hours—despite the apex bank’s earlier N1.7 trillion liquidity mop-up via Open Market Operations (OMO).
Banks’ opening balances at the CBN also rose from N163 billion to N223 billion, underscoring ample cash levels heading into the festive break. This came even after the CBN raised over N11.2 trillion in OMO bills since November and repaid about N11.1 trillion, indicating that excess liquidity remains entrenched in the system.
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Analysts attribute the surge to a cautious lending environment, with banks preferring the safety of the SDF—currently yielding about 22.5 percent overnight—rather than expanding credit under tight monetary conditions. OMO stop rates in recent auctions ranged between 19 and 22 percent.
Market watchers say the CBN appears to be shifting toward passive liquidity management, relying more on the SDF than issuing fresh short-term debt, a move that supports tightening while limiting additional interest costs, estimated to be nearing N2 trillion for November–December auctions.
As 2025 draws to a close, the heavy use of the SDF highlights weak lending appetite and lingering macroeconomic uncertainty. Analysts expect the CBN may return to more aggressive OMO operations in early 2026 to manage inflation, support the foreign exchange market, and address fiscal financing pressures.
