Nigeria’s banking system liquidity has surged to N8.06 trillion, reflecting a significant increase in excess cash held by financial institutions, according to data from the Central Bank of Nigeria (CBN).
The figure was recorded at the close of a three-day trading window ending March 18, 2026, as banks ramped up deposits at the CBN’s Standing Deposit Facility (SDF).
The rise in liquidity follows a shortened trading week due to public holidays and highlights a growing cash surplus in the financial system, posing challenges for monetary regulation.
Data shows that banks deposited N8.06 trillion at the SDF, representing a sharp increase of N1.39 trillion from N6.67 trillion recorded the previous day. This marks a significant jump compared to the N5.20 trillion to N5.65 trillion range observed in the prior week.
Opening balances across banks and discount houses also increased from N103.66 billion on March 16 to N120.60 billion by March 18, reflecting stronger liquidity conditions.
The surge was largely driven by inflows from maturing financial instruments. Between March 16 and 18, a total of N926.30 billion was injected into the system through Open Market Operations (OMO) and primary market repayments.
The largest inflow occurred on March 17, with N785.75 billion from OMO maturities and N83.60 billion from primary market repayments, significantly boosting cash levels in the system.
Analysts say the steady inflow pattern created a compounding effect, accelerating liquidity build-up across the banking sector.
More Insights:
Recent trends indicate that the current liquidity level is more than double the peak recorded in February 2026, when SDF placements reached about N4.26 trillion.
Despite previous efforts by the CBN to sterilise excess cash—such as absorbing N3.57 trillion within three days—banks continued to maintain high daily balances.
The latest N8.06 trillion figure signals a more sustained liquidity glut, raising concerns about inflationary pressure and the effectiveness of monetary policy tools.
What It Means:
The surge in excess liquidity could complicate the CBN’s efforts to control inflation and stabilise the financial system, as higher cash levels in banks may lead to increased lending and spending in the economy.
