Nigerian business banks dumped about N3.7 trillion in idle money on the Central Financial institution of Nigeria (CBN) on December 24, signalling deep extra liquidity within the banking system on the eve of Christmas.
Information launched by the apex financial institution overlaying December 22 to 24, 2025 reveals that lenders moved aggressively to park surplus money with the CBN, marking one of many largest single-day SDF inflows recorded in latest months.
The surge got here barely two days after the CBN carried out a N1.7 trillion Open Market Operation (OMO) on December 22, a transfer aimed toward mopping up extra liquidity. Regardless of that intervention, banks had been nonetheless awash with money, forcing them to channel funds into the standing facility quite than deploy them elsewhere.
The event displays a mixture of seasonal components and restricted short-term lending alternatives, as monetary establishments historically rebalance their books towards year-end.
With credit score demand subdued and danger concerns heightened through the vacation interval, banks opted to carry funds on the CBN, even at comparatively modest returns.
Why this issues
The N3.7 trillion parked by banks on the CBN just isn’t idle cash in principle, it’s cash that would have gone into loans for companies, mortgages, agriculture, and shopper spending, particularly throughout a peak festive interval like Christmas.
It reveals that financial coverage just isn’t absolutely translating into credit score development. Even after the CBN’s N1.7 trillion OMO mop-up, banks nonetheless most well-liked to deposit money with the apex financial institution quite than lend to the financial system. That alternative displays danger aversion, weak demand, or structural bottlenecks in credit score transmission.
The surge occurred simply earlier than Christmas, when shopper spending sometimes peaks. Extra money sitting on the CBN as an alternative of circulating within the financial system suggests missed short-term development momentum, significantly for retail, commerce, and small companies that rely on seasonal demand.
It additional raises questions on coverage effectivity and price. Funds positioned within the SDF earn curiosity paid by the CBN, which means public assets are used to soak up private-sector liquidity. Over time, this may add to the central financial institution’s monetary burden whereas doing little to stimulate productive funding.
The N3.7 trillion dump is not only a banking statistic; it’s a mirror of credit score circumstances, coverage transmission, and confidence within the financial system at a crucial second within the 12 months.
