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.
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.