Banks cut borrowings from CBN over excess liquidity
Deposit Money Banks have continued to reduce their borrowings from the Central Bank of Nigeria.
The CBN attributed this new development to excess liquidity in the system.
Banks borrowed N15.95bn from the CBN in the Standing Lending Facility window in November, the CBN disclosed this in its latest monthly economic report for November.
Part of the report read, “Deposit Money Banks and merchant banks continued to access the standing facilities window to square liquidity positions in November 2020.
“The trend at the CBN standing facilities window showed more frequency at the Standing Deposit Facility window, compared with the Standing Lending Facility, due to the banking system liquidity surfeit.
“Applicable rates for the SLF and SDF stood at 12.5 per cent and 4.5 per cent, respectively.
“Total request for the SLF granted from November 1-26, 2020 was N15.95bn, made up of N3.15bn direct SLF and N12.79bn Intraday Lending Facilities converted to overnight repo.”
The report stated that daily average was N2.66bn in six transaction days from November 1-26, 2020.
It stated that the total interest earned was N0.09bn.
Total SDF granted, during the review period, was N726.98bn with a daily average of N38.26 billion in 19 transaction days from November 1-26, 2020.
Daily request ranged from N31.30bn to N45.1bn.
Cost incurred on SDF in the month stood at N0.12bn.