Nigerian banks withdrew N941.85 billion from the Central Bank of Nigeria’s (CBN) Standing Deposit Facility in one day, reducing total overnight deposits to below N4 trillion amid fluctuations in banking system liquidity.
Data from the apex bank showed that deposits under the facility fell to N3.76 trillion on October 7, 2026, from N4.70 trillion recorded the previous day, representing a 20 per cent decline.
The reduction was the largest single-day drop since the end of September, when banks also adjusted their overnight positions amid changing liquidity conditions.
Banks had deposited N4.86 trillion with the CBN on October 5 before reducing the balance to N4.70 trillion on October 6.
The latest decline brought deposits to their lowest level since September 30, when placements fell from N6.28 trillion to N4.55 trillion.
The Standing Deposit Facility allows banks to deposit excess funds with the CBN overnight without collateral. It also serves as one of the apex bank’s instruments for managing liquidity in the financial system.
The movement in deposits comes weeks after the CBN’s Monetary Policy Committee reduced the Monetary Policy Rate by 350 basis points to 23 per cent at its September 22 meeting.
Despite the rate cut, the committee retained the Cash Reserve Ratio for commercial banks at 45 per cent, while merchant banks continued to operate with a 16 per cent requirement.
The CBN also maintained the 75 per cent CRR on non-Treasury Single Account public-sector deposits and adjusted the asymmetric corridor around the Monetary Policy Rate to plus 50 and minus 300 basis points.
The decline in Standing Deposit Facility balances indicates that banks are keeping less money overnight with the apex bank than they did during the liquidity build-up recorded in September.
However, the CBN data does not specify how the withdrawn N941.85 billion was redeployed across the banking system.
The daily fluctuations suggest that banks continue to adjust their overnight positions in response to funding needs, available market opportunities and prevailing monetary policy conditions.
The development comes as Nigeria’s financial markets enter the final quarter of 2026, with banks and investors responding to the recent reduction in the benchmark interest rate and changing liquidity conditions.
