According to information Deposit Money Banks (DMBs) and merchant banks borrowed N9.17 trillion from the Central Bank of Nigeria (CBN) through its Standing Lending Facility window over a seven-month period.
Banks frequently use the CBN’s SLF window to borrow cash to meet their short-term liquidity needs, subject to certain eligibility conditions.
Lenders can also deposit excess cash or reserves through the CBN’s Standing Deposit Facility window.
Economic reports obtained from the CBN revealed that lenders borrowed N7.27 trillion via the SFL window during the second quarter of 2021, but reduced their borrowing significantly to N1.39 trillion in the third quarter.
The reports further showed that banks borrowed N503.69 billion from the CBN in October, this bringing the total borrowings to N9.17 trillion between April and October, 2021.
The CBN third-quarter report on the SLF and SDF windows read in part, “The increased level of liquidity was further evident in the pattern of transactions at the bank’s standing facilities window, as a total request for Standing Deposit Facilities by banks increased by 28.2 per cent to N568.15 billion in the review period, while request at the standing lending window declined significantly to N1.39 trillion, from N7.27 trillion in the second quarter of 2021.”
The CBN further stated that lending activity dominated at the standing facility window, reflecting liquidity constraints in the segment in October, according to Economic Confidential.
Ojelabi, the publisher of Freelanews, is an award winning and professionally trained mass communicator, who writes ruthlessly about pop culture, religion, politics and entertainment.
