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HomeBusinessBanks borrowing from CBN repo window declines 0.45% to N1.35 trln in...

Banks borrowing from CBN repo window declines 0.45% to N1.35 trln in Q1 2022

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Borrowing from the Central Bank of Nigeria (CBN) by banks declined marginally by 0.45 per cent to N1.35 trillion in the first quarter of 2022 as against N1.36 trillion recorded a year early.

The nation’s commercial lenders borrow through the regulatory bank’s Standing Lending Facility (SLF) on a daily basis to shore up their short term liquidity shortfalls.

From the month of January to March, bank’s deposits of their surplus fund at the CBN Standing Deposit Facility (SDF) also decline in the period.

In January, banks deposited N572.5 billion with CBN but it dropped by 48.2 per cent to N489.05 billion in February. In addition, the borrowing dropped further to N296.8 billion in March.

READ ALSO: Nigeria to borrow N720 bln via bonds on domestic market in 2nd quarter

Analysts also attributed the decline in banks activities at the SDF to the low yield attracted by their fund place with the regulatory bank.

In November 2014, the CBN said it observed that banks and discount houses preferred to keep their idle balances in the SDF with the apex bank.

Unfortunately, this preference contributed to the restraining of the financial intermediation process, the reason the CBN opted to review the guidelines for the operation of the SDF.

The review recommended that daily placements by discount houses and banks at the SDF should not exceed N7.5 billion.

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