Story perspectives

Nigeria's Central Bank Cuts Bank Deposits to Combat Inflation

10/10/2025

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Summary

Story summary

The Central Bank of Nigeria (CBN) has intensified its liquidity mop-up, resulting in a 42.3% decrease in commercial banks' deposits in the Standing Deposit Facility (SDF) from ?6.07 trillion on October 2 to ?3.5 trillion by October 8, 2025.
This strategy aims to control inflation, stabilize the naira, and manage excess money supply.
Experts warn that reduced liquidity may limit credit availability, raise borrowing costs, and strain the banking sector.
Analysts caution that while the CBN's aggressive approach targets inflation, it may not effectively address underlying economic pressures.

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Story summary

The Central Bank of Nigeria (CBN) has intensified its liquidity mop-up, resulting in a 42.3% decrease in commercial banks' deposits in the Standing Deposit Facility (SDF) from ?6.07 trillion on October 2 to ?3.5 trillion by October 8, 2025.
This strategy aims to control inflation, stabilize the naira, and manage excess money supply.
Experts warn that reduced liquidity may limit credit availability, raise borrowing costs, and strain the banking sector.
Analysts caution that while the CBN's aggressive approach targets inflation, it may not effectively address underlying economic pressures.