Banks Deposit N4.15 Trillion With CBN as Excess Liquidity Persists
Nigerian commercial banks deposited N4.15 trillion with the Central Bank of Nigeria (CBN) through the Standing Deposit Facility (SDF), highlighting the continued presence of excess liquidity in the country’s financial system.
The development reflects the banking sector’s preference for parking surplus funds with the apex bank instead of deploying them into lending or other short-term investment opportunities.
Financial market analysts said the high volume of deposits indicates that liquidity remains abundant despite the CBN’s monetary tightening measures aimed at controlling inflation and stabilising the economy.
The Standing Deposit Facility enables deposit money banks to place excess cash with the CBN and earn interest, serving as one of the apex bank’s key monetary policy instruments for managing liquidity within the banking sector.
Analysts noted that sustained high deposits at the CBN could influence money market rates and monetary policy decisions, particularly as the regulator continues efforts to curb inflation, maintain exchange rate stability and strengthen financial system resilience.
The trend also underscores the cautious approach adopted by banks in managing liquidity amid prevailing economic conditions. Market observers believe the CBN will continue to monitor liquidity levels closely and deploy appropriate monetary tools to ensure stability in the financial sector.
