Nigerian Banks Cut Overnight Deposits by ₦942bn in October

On October 7, 2026, Nigerian banks reduced their overnight deposits with the Central Bank of Nigeria (CBN) by ₦941.85 billion, resulting in total placements falling below ₦4 trillion. The Standing Deposit Facility (SDF) balances dropped to ₦3.76 trillion from ₦4.70 trillion the previous day, marking a 20 percent decline, the largest one-day reduction since late September.

Prior to this, banks had placed ₦4.86 trillion with the CBN on October 5, which was subsequently reduced to ₦4.70 trillion on October 6. This latest reduction is the lowest level of SDF placements since September 30, when deposits decreased from ₦6.28 trillion to ₦4.55 trillion.

The SDF allows banks to deposit excess funds overnight without collateral, and the decline indicates banks are holding less money with the CBN. This shift in liquidity follows the CBN's September 22 decision to lower the Monetary Policy Rate by 350 basis points to 23 percent while retaining key cash reserve requirements.