Commercial banks in 11 days of business activities deposited an accumulative sum of N1.14 trillion with Central Bank of Nigeria (CBN).
The financial data of the apex bank also revealed that an accumulative N479 billion was borrowed by banks operating in the country.
Nigerian NewsDirect can report that banks using the Standing Deposit Facility (SDF) since May have increased deposit with CBN and reduced borrowing.
Using the Standing Lending Facility (SLF) window, banks borrowing from CBN dropped to N900 billion in May from N2.02 trillion reported in April.
A source disclosed that most Tier-II commercial banks had increased deposit with CBN following the decline in Monetary Policy Rate (MPR) and means to boost liquidity to drive daily business activities.
The Monetary Policy Committee had voted to reduce MPR to 13.5 per cent from 14.00 per cent.
This reflects on applicable rates for the SLF and SDF to drop to 15.50 per cent and 8.50 per cent from 16 per cent and nine per cent respectively.
Our correspondent can report that the maximum and minimum SDF by commercial banks in May was N144.1 billion and N31.7 billion respectively.
A economic report by CBN for April had revealed that the total SLF granted during the review period was N1,758.34 billion, (inclusive Intra-day Lending Facility (ILF) converted to overnight repo).
“Daily average was N103.43 billion in the 17 transaction days in April 2019. Total interest earned was N1.15 billion.
“The total SDF granted during the review period was N861.91 billion with daily average of N50.70 billion in the 17 transaction days. Daily request ranged from N3.30 billion to N145.40 billion. Cost incurred on SDF in the month stood at N1.27 billion,” the report added.
However, the CBN in May sold N973.9 billion at the Open Market Operations (OMO).
The CBN explained that it continued to intervene through the conduct of direct OMO, to influence liquidity in the system in April 2019.
According to the CBN economic report, “The tenors of the instruments ranged from 86 to 364 days. Total amount offered, subscribed to and allotted, stood at N550.00 billion, N841.49 billion and N691.29 billion, respectively.
“The bid rates ranged from 11.50 per cent to 14.30 per cent, while the stop rates were from 11.78 per cent to 14.30 per cent. Repayment and maturity of CBN bills was N305.35 billion, translating to a net withdrawal of N385.94 billion.”
According to the CBN, the key financial market indicators remained stable despite mixed liquidity trends in the domestic money market.
“During the review period, observed excess liquidity in the system, arising, mainly, from matured CBN bills worth N691.29 billion and fiscal injections, were mopped up through OMO auctions. Consequently, major money market rates trended in tandem with the level of liquidity in the system.
“The total value of money market assets outstanding in April 2019 was N12,372.83 billion, showing an increase of 4.3 per cent, in contrast to the 2.3 per cent decline in the preceding month. The development was attributed, largely, to the 5.3 per cent and 147.0 per cent growth in FGN Bonds and commercial paper, respectively,” the economic report by CBN for April added.
Source: Nigerian NewsDirect
