CBN liquidity mop-up falls short as banks’ SDF deposits hit N8.31tn

The Central Bank of Nigeria’s effort to drain excess cash from the banking system is under pressure after banks’ deposits at the apex bank rose to N8.31tn despite a fresh Open Market Operations auction. CBN data showed banks placed N8.311tn in the Standing Deposit Facility on Friday, 6 November 2026, up N347.44bn from the previous day.

OMO auction absorbs N724.32bn

The increase came on the same day the CBN absorbed N724.32bn through an OMO auction. Banks’ SDF placements rose by N1.345tn between 4 November and 6 November, indicating that surplus funds are still building up despite the central bank’s interventions.

The CBN offered N1tn in two OMO instruments but received subscriptions of N1.887tn, nearly twice the amount offered. It allotted only N724.32bn, leaving N1.163tn of bids unaccepted. The 179-day bill attracted N741.62bn in bids, with N405.62bn allotted at a stop rate of 17.25 per cent. The 270-day instrument received N1.146tn in subscriptions, but the CBN accepted only N318.70bn at a stop rate of 16.54 per cent. The auction was significantly smaller than the 3 November operation, when the CBN allotted approximately N2.95tn.

Opening balances fall as SDF rises

The rise in SDF placements coincided with a sharp drop in banks’ opening balances. Opening balances fell from N612.06bn on 4 November to N194.10bn on 6 November, a decline of N417.96bn. The movement suggests banks are moving more available funds into the CBN’s deposit facility, which allows them to earn interest on surplus cash.

The growing SDF balance raises questions about whether available liquidity is translating into increased credit to businesses and households. The trend could prompt further liquidity withdrawal operations as the regulator seeks to manage monetary conditions and stop excess cash from undermining its policy objectives.

N13.79tn inflow expected in November

The liquidity build-up comes ahead of substantial expected inflows into the banking system. The Financial Markets Dealers Association projects about N13.79tn in November inflows, largely from OMO maturities, FAAC allocations and Treasury bills repayments. Banking system liquidity also increased by 56.75 per cent to N7.373tn in October from N4.703tn in September.

Those inflows could complicate the CBN’s liquidity management if banks keep placing large surplus cash at the apex bank. For businesses and households, the key concern is whether the cash will stay parked at the CBN or flow into credit. Market participants will watch whether the regulator raises its OMO interventions in the coming weeks or keeps its selective approach to liquidity withdrawal.