Banks’ borrowings from CBN up 75 % to N1.8 trn in Q1’20

By Elizabeth Adegbesan

Banks’ borrowings from the Central Bank of Nigeria (CBN) Standing Lending Facility rose quarter-on-quarter, QoQ, by 75 percent to N1.8 trillion in the first quarter of the year (Q1’20) from N1.3 trillion in the preceding quarter, Q4’19.

 

However, banks’ patronage of the apex bank’s Standing Deposit Facility (SDF), via deposit placement, fell by 56 percent to N843.09 billion in Q1’20 from N1.9 trillion in Q4’19.

 

Meanwhile, the currency-in-circulation (CIC) rose slightly by five percent to N2.3 trillion during the period from N2.2 trillion in Q4’19.

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In the Q1’20 Economic Report, the CBN stated: “The Deposit Money Banks (DMBs) and merchant banks continued to access the standing facilities window to square-up their positions. The trend at the CBN standing facilities window showed more frequency at the SLF window, as against the decreased patronage at the SDF window. Applicable rates for the SLF and SDF remained at 15.50 and 8.50 per cent, respectively.

 

“Total request for the SLF during the review quarter was N1.81 trillion. This was made up of N1.21trillion direct SLF and N597.96 billion Intraday Lending Facility (ILF) converted to overnight repurchase. Daily request ranged from N0.72 billion to N181.63 billion and averaged N40.26 billion in the 45 transaction days in the period. Total interest earned at 15.50 per cent was N767.13 billion.

 

“The total SDF granted during the review period was N843.09 billion with a daily average of N14.05 billion in the 60 transaction days in the first quarter of 2020. Daily request ranged from N1.57 billion to N47.90 billion. Cost incurred on SDF in first quarter of 2020 stood at N0.46 billion.”

 

On CIC,   the report stated: “Currency-in-circulation (CIC), on quarter-on-quarter basis, fell by 6.0 per cent to N2.29 trillion at end-March 2020, compared with a decline of 7.5 per cent at the end of the first quarter of 2019, but was in contrast to the growth of 21.8 per cent recorded at the end of the fourth quarter of 2019. The development, relative to the level in the preceding quarter, reflected, mainly, the decline in currency outside depository corporations and the fall in vault cash, owing to the increase in Cash Reserve Ratio (CRR)    by the Bank.”

 

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