In a data obtained from the banking sector regulator, the Deposit Money Banks (DMB) and merchant banks have borrowed a total sum of N9.17tn from the Central Bank of Nigeria via its Standing Lending Facility (SLF) window in the space of seven months.
In order to temporarily address their short-term liquidity needs, the DMBs often patronize the CBN’s Standing Lending Facility to borrow funds which however depends on certain eligibility requirements.
An economic report obtained from the CBN revealed that lenders borrowed N7.27 trillion via the SLF window during the second quarter of 2021, but minimized their borrowing to N1.39 trillion in the third quarter.
In its third-quarter report on the SLF and SDF windows, the CBN stated that 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% to N568.15bn in the reviewed period, while request at the standing lending window declined significantly to N1.39tn, from N7.27tn in the second quarter of 2021.
The reports further revealed that banks borrowed N503.69bn from the CBN in October, adding that it comprised of N337.78 billion direct SLF and N165.92 billion Intra-day Lending Facility converted to overnight SLF.
However, the total SDF in October was N112.56 billion, with a daily average of N7.03bn in 16 transaction days, while the cost incurred on the SDF stood at N0.02bn.
