Excess Liquidity: Banks Placements at SDF Window Rise to N3.2trn
Deposit money banks’ (DMBs) placements at the Central Bank of Nigeria (CBN) Standing Deposit Facility (SDF) increased to N3.2 trillion in the absence of significant funding pressures in the money market.
This happened while some commercial lenders faced short-term liquidity stress that led to borrowing at the CBN window above the rate earned on placements with the authority.
Activities resumed at the Standing Lending Facility (SLF) yesterday as liquidity deficit commercial banks accessed funding from the Apex Bank, signalling tightening.
The market opened the day with a surplus balance of N3.3 trillion, representing an increase of N63.4 billion from Friday’s level, investment firms said in separate reports.
The improvement was attributed to the N241.8 billion increase in DMBs placement in the CBN’s window to N3.2 trillion, AIICO Capital Limited said.
The investment firm said the SDF increase was, however, tempered by the N94 billion accessed by some commercial banks with liquidity deficits through the SLF window.
However, average funding cost held steady as the Open Repo Rate (OPR) and overnight lending rate closed flat at 22.50% and 22.72%, respectively.
Amidst an expected inflow of N1.1 trillion in OMO maturities, analysts expect moderation in funding rate, barring any funding activities.
System liquidity strengthened last week, opening at N2.19 trillion and closing at N3.20 trillion on Friday despite the T-bill auction conducted by the Debt Management Office (DMO).
The improvement was supported by N772.97 billion in OMO maturities, which more than offset the N709.62 billion debited for OMO allotments.
As a result, interbank rates were broadly stable: the Open Repo Rate (OPR) closed flat at 22.50%, while the Overnight Rate (OVN) inched marginally higher to 22.72% from 22.71%. SEC Sets 2026 Recapitalisation Plan
