DEPOSIT Money Bank (DMB) last week accessed The sum of N266. 8 billion from the Central Bank of Nigeria (CBN) to meet their short-term demands.
The financial system liquidity closed lower at ₦575.9billion, 57.6 percent lower than the previous week.
This was supported by a Standing Lending Facility worth ₦266.8billion and opening balance of banks at ₦314.3billion market dealers revealed.
Nonetheless, participants said Open Repo (OPR) and Overnight (OVN) rates declined 4.10 percentage points (ppts) and 3.8ppts when compared week by week (w/w) to close at 26.2percent and 27.3percent, respectively.
There are indications that banks are relying more on Central Bank of Nigeria, for liquidity as their borrowing from the apex bank’s Standing Lending Facility increased month-on-month (MoM) by 559 percent to N376.64 billion in November from N57.14 billion in October 2023.
Details from the CBN Financial data for November 2023 showed that bank deposits in the apex bank’s Standing Deposit Facility, SDF, also declined MoM by 18 percent to N2.4 trillion in November from N2.94 trillion in October.
The apex bank has two short-term lending windows for banks and merchant banks namely-SLF and Repurchase (Repo) lending.
Meanwhile, banks’ borrowing from the apex bank has been fluctuating this recently, but the increase in banks borrowings from the CBN SLF indicates a continuous decline in banking system liquidity.
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