Nigeria: Monthly economic report of CBN shows that it lent N595.34b to banks in January-February

The economic report of the Central Bank of Nigeria which comes out every month has revealed that it has lent banks a total of N595.34 billion between January and February this year.

The economic report of the Central Bank of Nigeria which comes out every month has revealed that it has lent banks a total of N595.34 billion between January and February this year.

The report stated that subdued activities in the SLF window and the strong patronage at the Standing Deposit Facility confirms the increased liquidity in the banking system.

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Activities at the standing facility window show the ease in the banking system liquidity during the review period.

The total SDF raised significantly by 60.79% to N472.38 billion, from N293.79 billion during January 2022.

Contrarily, transactions at the SLF declined by 24.69%, to N255.75 billion, from N339.59 billion during January 2022.”

The former President of the Association of National Accountants of Nigeria, Sam Nzekwe, stated that banks borrow from the CBN as a lender of last resort and keep some value of their savings with the CBN.

The banks need to take from the CBN as it is the bank of last resort.

CBN is also keeping some of their money that they can’t lend.

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The CBN Governor, Godwin Emefiele, while speaking about liquidity in the sector in the period after a Monetary Policy Meeting had, stated that members noted the growth rate of the broad money supply raised to 2.12% during February 2022, as compared to 1. 74% in January 2022, which can be considered as an expansion in the growth rate of Domestic Net Assets to 5.78% in February 2022 from 2.62% in the last month.

Regarding the developments in the money market, the Committee witnessed the movement in money market rates in the asymmetric corridor, showing the existing liquidity conditions in the banking system.

Therefore, the monthly weighted average Open Buyback and Inter-bank call rates fell to 5.81 and 9.30% in February this year from 6.00 and 16.00% in January 2022, respectively.

The decline in the rates showed the liquidity conditions in the banking system.

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