Views: Visits 15 CBN As deposit balance declines 57% Cost of funds hits 2yrs high By Babajide Komolafe In apparent reflection of the intense scarcity of funds that prevailed in the interbank money market in April, banks’ borrowing from the Central Bank of Nigeria (CBN) rose by 174 per cent to N2.48 trillion from N904.6 billion in March. The banks’ deposits with CBN also declined significantly. Banks borrow from the CBN through its Standing Lending Facility (SLF) to fund short term liquidity cash shortfall. They, however, deposit their idle cash in the apex bank’s Standing Deposit Facility (SDF). Financial Vanguard findings in the CBN’s data release show that while banks’ borrowing through the SLF rose sharply by 174 per cent in April, their deposits with the apex bank through the SDF fell by 57 per cent to N169.74 billion in April from N392.37 billion in March.
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Vanguard News
Excess liquidity: CBN hits banks with N600bn CRR debit
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By Babajide Komolafe
The Central bank of Nigeria (CBN) on Friday hit the banking system with N600 billion Cash Reserve Ratio (CRR) debit in a bid to combat idle cash (excess liquidity) in the interbank money market.
Financial Vanguard investigations revealed that excess liquidity in the banking system, which persisted throughout last year, rose further to N1.1 trillion at the close of business on Thursday from N996.9 billion the previous week.
The increase was due to an inflow of N438.7 billion from matured secondary market ( Open Market Operations, OMO) treasury bills during the week.
By Emeka Anaeto
Last week across the money market there was a consensus report of improvements in credit conditions through the fourth quarter of 2020.
Market sources say that broad-based growth in secured, un-secured and corporate facilities indicate an improvement in macroeconomic conditions. This has been confirmed by the latest Survey of the Central Bank of Nigeria (CBN) released last week.
Market dealers point to aggressive push by credit suppliers to increase their market share.
According to the CBN, demand for loans is expected to bounce back, as the economy reopens, and businesses creep out of the hands of the ravaging Coronavirus pandemic.