Loans from the Central Bank of Nigeria (CBN) have dropped for the second time in a row, as it now stands at N666 billion.
In its latest financial data, the apex bank noted that the borrowings from financial institutions in the country significantly reduced, and it did consecutively.
BizWatch Nigeria understands that financial institutions in the country often access the CBN’s Standing Lending Facility (SLF) window to borrow funds, although subject to certain eligibility requirements.
Amongst other reasons, they (the banks) often do this to temporarily address their short-term liquidity obligations.
The apex bank lends money to banks and merchant banks through the SLF at an interest rate of 100 basis points (bpts) above the Monetary Policy Rate (MPR) of 11.50%.
The CBN also lends money to banks and merchant banks through the Repurchase (Repo) arrangement, which involves the purchase of banks’ securities with the agreement to sell back at a specific date and at a higher price.
According to CBN data through Repo, banks’ borrowing dropped by 47%, Month on Month (MoM) in February 2022 to N480.35 billion from N952.79 billion in January. Similarly, banks’ borrowing through the CBN’s SLF fell sharply by 40%, MoM, to N186.48 billion from N313.43 billion in January.
Meanwhile, CBN had advised manufacturers in the country, whose revenues are naira-denominate not to take dollar loans.
The apex bank, therefore, pledged to continue to provide naira funding, as it maintained that where the revenue stream is in naira, dollar loans should be avoided.
 have dropped for the second time in a row, as it now stands at N666 billion.){kind=link}