Nigerian Banks Turn to CBN for Risk-Free Returns, Deposits Reach N58 Trillion

Nigerian banks are increasingly depositing excess liquid funds with the Central Bank of Nigeria (CBN) to earn risk-free returns, resulting in a significant increase in total deposits to N58 trillion. The recent adjustment in the CBN's corridor incentives has made overnight deposits more attractive, prompting banks to opt for safer investments.

Despite a lower Monetary Policy Rate (MPR), banks are still net depositors with the CBN's Standing Deposit Facility (SDF) rate remaining attractive. This trend highlights the banking sector's appetite for safer high-yield placements amidst lingering macroeconomic uncertainties.

Nigerian Treasury Bill yields have also seen an uptick, reflecting sustained bullish sentiment and strong investor demand in the secondary market.