Nigeria’s banking system witnessed a sharp reversal in liquidity dynamics last week, as commercial banks cut back excess cash placements with the Central Bank of Nigeria (CBN) by 41.6 per cent, even as borrowing through the regulator’s lending window surged more than fourfold.
In a weekly update by Coronation Merchant Bank seen by Daily Sun on Monday, banks’ deposits at the CBN’s Standing Deposit Facility (SDF) dropped to N539.12 billion, down from N923.68 billion by August 18, 2025. Conversely, utilisation of the Standing Lending Facility (SLF) climbed steeply, rising from N179.08 billion to N821.50 billion by August 22, 2025.
This represents an increase of 358 per cent and reflects mounting cash pressures across the financial system, driven by aggressive liquidity mop-up operations by the CBN.
A significant driver of the tightening was the Open Market Operation (OMO) auction conducted midweek, which absorbed substantial liquidity from the banking sector.
Specifically, at the OMO auction held on August 21, the Central Bank of Nigeria (CBN) offered N600.00 billion across 89-day and 124-day tenors.
