Punch
Deposit Money Banks and merchant banks have borrowed the sum of N9.17tn from the Central Bank of Nigeria through its Standing Lending Facility window within a period of seven months, according to figures obtained from the banking sector regulator.
Banks often access the CBN’s SLF window to borrow funds, subject to certain eligibility requirements, in order to temporarily address their short-term liquidity needs.
Lenders also access the CBN’s Standing Deposit Facility window to deposit their excess cash or reserves.
Economic reports obtained from the CBN revealed that lenders borrowed N7.27tn via the SFL window during the second quarter of 2021, but reduced their borrowing significantly to N1.39tn in the third quarter.
The reports further showed that banks borrowed N503.69bn from the CBN in October.
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 N568.15bn in the review period, while request at the standing lending window declined significantly to N1.39tn, from N7.27tn 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.
