Nigerian banks have placed close to N7 trillion in surplus funds with the Central Bank of Nigeria, highlighting the strong liquidity currently circulating within the country’s financial system.
Latest data from the apex bank shows that deposit money banks channelled about N6.96 trillion into the Standing Deposit Facility on March 11 before the figure eased slightly to around N6.69 trillion the following day.
The facility allows banks to earn overnight interest on idle funds rather than keeping the cash unused.
The rise in deposits points to a growing pool of liquidity in the banking sector, partly driven by repayments from maturing government securities, which recently injected fresh funds into the market.
The News Chronicle gathered that about N1.5 trillion returned to investors during the period as Treasury bills and government bonds matured, boosting cash levels among banks and institutional investors.
Although the government continued to issue new debt instruments to absorb some of the funds, the scale of deposits suggests that banks still have significant liquidity on their books.
The Central Bank has been relying on several tools, including Treasury bill sales, open market operations, and the deposit facility, to manage excess cash in the system.
Analysts say the strategy is aimed at controlling inflationary pressures and stabilising short-term interest rates across the money market.
