The CBN Standing Lending Facility window data revealed that the amount of money that commercial banks borrowed from the Central Bank of Nigeria increased by 52 per cent in the first three weeks of December due to liquidity challenges in the economic sector. According to the report, Deposit Money Banks (DMBs) in the country borrowed N2.305tn from the regulator to cover their cash shortfall positions between December 1 and 22, 2017.
The cash represents 52 per cent increase over the N1.515tn the nation’s lenders borrowed from the apex bank to cover their positions between November 1 and 22, 2017.
Punch reports that DMBs use the CBN’s SLF to support their liquidity shortfalls and meet trading obligations on short-term basis. DMBs borrowed N1.019, N671bn and N614bn through the CBN’s SLF window during the first, second and third week of December respectively, the central bank data showed.
Further breakdown of the CBN SLF data showed that banks borrowed N231.92bn, N217.08bn, N228.26bn, N178.28bn, and N164bn, respectively from the central bank between December 4 and 8, 2017. Between December 11 and 15, the amounts borrowed were N178.02bn, N135.3bn, N123.77bn, N116.73bn and N117.64bn, respectively.
Meanwhile, between December 18 and 22, the banks borrowed N119.836bn, N132.651bn, N163.135bn, N110739bn, and N87.892bn, respectively.
Meanwhile, experts have attributed the development to liquidity challenge in the country.
