Nigerian Banks deposits over N30 trillion With CBN In 5 Days
- Nigerian banks deposited about N30.64 trillion with the CBN in five days, reflecting cautious lending
- Also, there was a strong demand for treasury bills, which led to N2.8 trillion in subscriptions
- Analysts expect liquidity to improve as N1.06 trillion OMO maturities and other inflows enter the system
Legit.ng journalist Dave Ibemere has experience in business journalism, with in-depth knowledge of the Nigerian economy, the stock market, and broader market trends.
Nigerian banks have increased their deposits with the Central Bank of Nigeria (CBN), lodging about N30 trillion within five days.
Available data shows that the massive deposits highlight banks’ continued reluctance to lend to the real economy amid prevailing economic uncertainties.
Source: UGC
Banks deposit with CBN
Leadership reports that financial institutions placed about N30.64 trillion with the apex bank through the Standing Deposit Facility (SDF) window within five trading sessions.
The SDF is the rate at which commercial and merchant banks deposits funds with the CBN.
The surge in deposits comes amid persistent liquidity pressure in the financial system, with the average liquidity deficit settling at N5.7 trillion, slightly higher than the N5.1 trillion recorded in the previous week.
A breakdown of the SDF placements shows that banks deposited N5.20 trillion on Monday, N5.27 trillion on Tuesday, N6.96 trillion on Wednesday, N6.69 trillion on Thursday, and N6.51 trillion on Friday.
The total deposits of N30.639 trillion are higher than the N26.161 trillion recorded in the preceding week.
Analysts say the large deposits reflect cautious liquidity management by banks in a high-interest-rate environment.
Despite the tight liquidity conditions, the overnight policy rate (OPR) remained unchanged at 22.0%, while the overnight lending rate increased by 12 basis points week-on-week to 22.3%.
Treasury bills market records strong demand
At the Treasury bills primary market, the CBN offered N850 billion across the 91-day, 182-day, and 364-day instruments.
Data shows that the 91-day bill recorded an offer of N100 billion but attracted N130.7 billion in allotments, while the 182-day instrument had an offer of N150 billion and attracted N71.4 billion in allotments.
The 364-day instrument dominated the auction, with N600 billion on offer and N731.8 billion allotted.
Overall demand stood at N2.8 trillion, translating to a 3.3 times bid-to-offer ratio, with strong investor appetite for the 364-day instrument, which recorded 4.3 times subscription.
Source: Getty Images
Stop rates settled at 16.0% for the short tenor and 16.7% for both the mid- and long-term instruments, while total allotment came to N933.9 billion, about 9.9% above the initial offer.
Secondary market turns bearish
Meanwhile, activities in the secondary Treasury bills market turned bearish during the week, as yields rose by 10 basis points to close at 17.9%.
CBN names 28 banks that cannot open branches outside Nigeria
Earlier, Legit.ng revealed a breakdown of Nigerian banks by licence class obtained from the Central Bank of Nigeria shows that at least 28 banks in the country are currently not authorised to operate internationally.
Under CBN’s regulatory framework, banks with international authorisation are permitted to operate beyond Nigeria’s borders and engage in cross‑border banking activities.
Source: Legit.ng
