There are indications that many banks are still under increasing liquidity pressure as the Central Bank of Nigeria’s, CBN, said their borrowings from the apex bank’s Standing Lending Facility, SLF, rose by 72 percent to N6.2 trillion in the third quarter of 2019 (Q3’19) even as their deposits in the apex bank dropped by 12 percent to N14 trillion during the period.
The apex bank disclosed this in its Economic Report for Q3’19. The borrowing was N3.6 trillion in Q2’19.
The report stated: “The banks continued to access the CBN’s Standing Facilities to square up their positions either by borrowing from the standing lending facility (SLF) or depositing their excess liquidity at the standing deposit facility (SDF) of the CBN at the end of each business day.
“Total request for the Standing Lending Facility (SLF), inclusive of direct SLF and Intra-day lending facilities (ILF) that were converted to overnight repo during the review quarter, stood at N6.2 trillion, compared with N3.6 trillion in the preceding quarter.
Daily average transaction value amounted to N100.05 billion in 62 transaction days, with total interest earned at N4.21 billion, compared with the daily average of N62.48 billion in 58 transaction days, with a total of N2.63 billion, as interest earned at the end of the preceding quarter.
“Total standing deposit facility (SDF) granted during the review period was N2.08 trillion, with daily average of N33.08 billion, compared with N4.98 trillion, in the second quarter of 2019. The cost incurred on SDF in the review quarter amounted to N0.63 billion, compared with N1.67 billion in the preceding quarter.”
On deposits to the CBN, the report stated: “Total deposits at the CBN amounted to N14.08 trillion at end- August 2019, indicating a decline of 12.1 per cent below the level at end-June 2019.
The fall was attributed to 18.4 per cent, 9.3 per cent and 5.8 per cent decline in the deposits of the commercial banks, the federal government and the private sector, respectively.
“Of the total deposits at the CBN, the shares of the Federal Government, banks and private sector deposits were 44.3 per cent, 35.2 per cent and 20.5 per cent, respectively.”