Banks’ Borrowings from Central Bank of Nigeria Surge 466% YoY Due to Increased Currency Holdings
Banks’ borrowings from the Central Bank of Nigeria (CBN) through the Standing Lending Facility (SLF) have seen a significant year-on-year increase of 466%, totaling N268.3 billion as of October 2023. This surge is attributed to the rise in currency holdings outside banks. The CBN offers short-term lending options to banks, including SLF and Repurchase (Repo) lending. Additionally, deposits made by banks in the CBN’s Standing Deposit Facility (SDF) have risen by 465% year-on-year, reaching N5.29 trillion in October 2023.
Key Points:
- Currency holdings outside banks increased to N2.35 trillion in September 2023, marking a 195% rise since January 2023.
- This surge in currency holdings was influenced by the redesign of N200, N500, and N1000 notes.
- Deposits made by banks in the CBN’s Standing Deposit Facility (SDF) surged by 465% year-on-year, reaching N5.29 trillion in October 2023 from N935 billion in October 2022.
- The CBN’s foreign exchange sales to various markets and enterprises experienced a year-on-year decline of 121%, totaling $2.92 billion in the second quarter of 2023.