Nigerian banks increased their deposits with the Central Bank of Nigeria (CBN) to N8.311 trillion as excess liquidity in the banking system remained elevated, despite the apex bank withdrawing N724.32 billion through its Open Market Operations (OMO) auction.
The development occurred during the week ended November 6, 2026, as banks continued to place substantial funds with the CBN through its Standing Deposit Facility (SDF), indicating that significant liquidity remains within the financial system.
According to financial data published by the CBN and analysed by Nairametrics, SDF placements increased by N347.44 billion, representing a 4.36 per cent rise from N7.964 trillion recorded on Thursday, November 5.
The figure was also N1.345 trillion, or 19.30 per cent, higher than the N6.966 trillion recorded on Wednesday, November 4.
The increase came despite the CBN’s latest OMO auction, through which it accepted N724.32 billion out of N1.887 trillion submitted by investors.
The auction represented an attempt by the apex bank to reduce excess liquidity in the financial system, although the amount withdrawn was insufficient to reverse the rising SDF balances.
Banks’ Deposits with CBN Continue to Rise
Data from the CBN showed that commercial banks consistently increased their placements under the Standing Deposit Facility throughout the three-day period.
The figures showed that banks deposited N6.966 trillion on November 4, N7.964 trillion on November 5 and N8.311 trillion on November 6.
This represents an increase of approximately N1.345 trillion within two days, reflecting the substantial amount of funds financial institutions continue to hold with the apex bank.
The rising deposits suggest that banks have continued to favour placing excess cash with the CBN rather than keeping the funds in their operational accounts or deploying them elsewhere in the financial system.
Meanwhile, banks’ opening balances declined significantly over the same period.
Opening balances dropped from N612.06 billion on November 4 to N258.83 billion on November 5, representing a 57.71 per cent reduction.
The figure declined further to N194.10 billion on November 6, indicating another decrease of N64.73 billion, or 25.01 per cent.
Overall, opening balances fell by N417.96 billion, representing a 68.29 per cent decline between November 4 and November 6.
The figures indicate a substantial movement of funds away from banks’ opening balances as liquidity placements with the CBN increased.
CBN Accepts N724.32 Billion at OMO Auction
At its November 6 OMO auction, the CBN offered N1 trillion in treasury instruments, divided equally between 179-day and 270-day bills.
Investor demand was significantly higher than the amount offered, with total subscriptions reaching N1.887 trillion, representing approximately 188.72 per cent of the offer.
However, the apex bank accepted only N724.32 billion, equivalent to 72.43 per cent of the amount offered, leaving approximately N1.163 trillion in bids unallocated.
The 179-day instrument, scheduled to mature on May 4, 2027, attracted N741.62 billion in subscriptions.
The CBN allotted N405.62 billion, representing 54.70 per cent of the bids, at a stop rate of 17.25 per cent and a true yield of 18.8441 per cent.
The 270-day instrument, which matures on August 3, 2027, attracted stronger demand, receiving N1.146 trillion in subscriptions.
However, the CBN accepted only N318.70 billion, representing 27.82 per cent of the bids, at a stop rate of 16.54 per cent and a true yield of 18.8458 per cent.
The longer-dated instrument recorded an unallocated balance of N826.90 billion, suggesting that the apex bank adopted a more selective approach despite the stronger investor demand.
Both instruments recorded virtually identical true yields of approximately 18.84 per cent, although the 179-day bill had a stop rate 71 basis points higher than the 270-day instrument.
No new OMO repayments were recorded during the auction, meaning the N724.32 billion represented a fresh withdrawal of liquidity rather than a refinancing of maturing obligations.
November 6 Auction Smaller Than Previous CBN Operations
The latest liquidity withdrawal was considerably lower than the amount raised by the CBN earlier in the month.
At its November 3 OMO auction, the apex bank allotted approximately N2.95 trillion as part of its broader liquidity management operations.
Combined with the November 4 Treasury Bills auction, the CBN raised approximately N3.46 trillion across the two operations.
The N724.32 billion accepted on November 6 was therefore significantly smaller, representing roughly one-quarter of the November 3 OMO allotment.
Meanwhile, Treasury Bills repayments also contributed to liquidity conditions during the week.
The CBN recorded N572.55 billion in primary-market repayments on November 5, exceeding the N509.40 billion raised through the November 4 Treasury Bills auction.
This resulted in a net liquidity injection of N63.15 billion into the financial system.
More Liquidity Expected in November
The outlook for the Nigerian banking system suggests that additional liquidity could enter the financial market before the end of November.
The Financial Markets Dealers Association (FMDA) has projected approximately N13.79 trillion in liquidity inflows during the month, largely driven by OMO maturities, Federation Account Allocation Committee (FAAC) distributions and Treasury Bills repayments.
Banking system liquidity also increased by 56.75 per cent to N7.373 trillion in October, compared with N4.703 trillion recorded in September.
The expected inflows could present additional challenges for the CBN as it attempts to manage excess funds and maintain stability in the financial system.
Investors and market participants will consequently be monitoring the apex bank’s next liquidity management operations, particularly whether it increases its OMO allotments to absorb more funds or continues accepting amounts significantly below total investor subscriptions.
Another Monetary Policy Committee meeting is also scheduled for November, with its decisions expected to provide further direction for monetary policy and financial market conditions.