CBN clears over ₦5 trillion in debt as banks slash deposit placements
Story by Martha Gwary.
The Central Bank of Nigeria (CBN) executed more than ₦5 trillion in debt repayments within a single week—between Friday, 14 November and Friday, 21 November—amid declining bank deposit placements and heightened liquidity volatility across the financial system.
Data tracked by Nairametrics during the period show that the apex bank settled ₦3.9 trillion in Open Market Operation (OMO) obligations and an additional ₦1.2 trillion in primary market instruments, even as banks significantly reduced the volume of funds placed with the regulator.
The repayment cycle opened with a sharp decline: total repayments fell from ₦2.55 trillion on 14 November to ₦1.36 trillion by 18 November—an abrupt ₦1.18 trillion contraction reflecting fewer maturing bills and tightening system liquidity.
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On the issuance front, OMO sales surged to ₦2.97 trillion between 17 and 18 November, marking one of the largest single-day liquidity mop-ups in months. However, the momentum quickly faded; by 19 November, OMO sales had fallen back to ₦903.35 billion.
The CBN also settled ₦1.2 trillion in primary market repayments during the week, with the most substantial payout occurring on 20 November, when maturities peaked at ₦689.55 billion before dropping sharply to ₦231.28 million on 21 November. Earlier in the week, repayments stood at ₦254.83 billion on 17 and 18 November, up from ₦271.00 million on 14 November, reflecting clustered NTB and bond maturities.
Primary market issuances mirrored the volatility. The Federal Government raised approximately ₦1.09 trillion through Nigerian Treasury Bills (NTBs) and FGN bonds on 20 November as part of its ongoing domestic borrowing programme.
A pronounced liquidity squeeze was also evident in the banking sector. Deposit placements at the CBN’s Standing Deposit Facility (SDF) dropped steeply from ₦2.50 trillion on 19 November to ₦1.65 trillion on 20 November, and further down to ₦1.15 trillion by 21 November—a combined ₦1.35 trillion decline in just 48 hours.
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Banks’ opening balances reflected similar pressure, sliding from ₦210.75 billion on 19 November to ₦145.28 billion a day later, before a modest recovery to ₦150.18 billion on 21 November.
The interplay of massive repayments, uneven OMO activity, and shrinking bank deposits underscores the liquidity turbulence that has characterised the money market in recent weeks. Analysts note that the midweek spikes were driven by heavy NTB and bond maturities clustering around central auction dates.
For now, the CBN’s ₦5.1 trillion repayment effort highlights both the scale of the government’s short-term debt obligations and the delicate liquidity management required as the market approaches December—traditionally one of the most active periods for debt maturities and fiscal settlements.
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