Nigerian Banks Withdraw ₦941.85bn From CBN as Overnight Deposits Fall Below ₦4tn

Nigerian banks withdrew ₦941.85 billion from the Central Bank of Nigeria’s (CBN) Standing Deposit Facility in one day, reducing total overnight deposits to ₦3.76 trillion amid continued swings in banking system liquidity.

Data from the apex bank showed that deposits fell from ₦4.70 trillion on October 6, 2026, to ₦3.76 trillion on October 7. The decline of about 20 per cent marked the largest single-day reduction since the end of September.

Banks had deposited ₦4.86 trillion with the CBN on October 5 before reducing the balance to ₦4.70 trillion the following day. The latest drop brought placements to their lowest level since September 30, when deposits fell from ₦6.28 trillion to ₦4.55 trillion.

The Standing Deposit Facility allows banks to keep excess funds with the CBN overnight without collateral. It is one of the monetary authority’s tools for managing liquidity and influencing short-term conditions in the banking system.

The movement in deposits comes weeks after the CBN’s Monetary Policy Committee reduced the Monetary Policy Rate (MPR) by 350 basis points to 23 per cent at its September 22 meeting. The decision marked a major change in the benchmark rate during the latest policy cycle, while key reserve requirements remained in place.

The cash reserve ratio for commercial banks remained at 45 per cent, while merchant banks continued to operate with a 16 per cent requirement. The CBN also retained a 75 per cent reserve requirement on non-Treasury Single Account public-sector deposits. Meanwhile, the MPC adjusted the asymmetric corridor around the MPR to +50 basis points and -300 basis points.

The decline in SDF balances means banks held less money overnight with the CBN than they had in previous days. However, the available figures do not explain where the withdrawn ₦941.85 billion went or how much was redirected to lending, securities, interbank transactions or other uses.

The daily changes highlight continued movement in banking system liquidity as financial institutions manage their funding needs and overnight positions. With Nigeria’s financial markets entering the final quarter of 2026, banks and investors are also operating under the CBN’s revised interest-rate framework.