The Central Bank of Nigeria stated on Thursday that banks lending money through Standing Lending Facility dropped by 98 percent year-on-year from N662.44 billion in November 2019 to N15.95 billion in November 2020. This according to the CBN is as a result of the excess liquidity in the banking system.
While presenting the economic report for 2020, the CBN said the apex bank’s interest earnings from the Standing Lending Facility dropped abruptly by 75.6 per cent from N370 million in November 2019 to N90 million in November 2020, adding that banks’ deposits into the regulator’s Standing Deposit Facility increased year-on-year by 64 per cent to N726.98 billion in November 2020 from N443.63 billion in November 2019.
The report indicated further that Deposit Money Banks and merchant banks have continued to access the standing facilities opening to occupy liquidity positions in November 2020, stating that the Standing Deposit Facility is more frequently accessed than the Standing Lending Facility whose rate stood at 12.5 per cent and 4.5 per cent respectively.
In its review,the CBN mentioned that the total amount of Standing Lending Facility granted between 1st and 26th November, 2020 was N15.95 billion, while its Standing Deposit Facility increased by N3.15 billion with N12.79 billion Intraday Lending Facilities which was converted to overnight repo.
In the same vein, within the same month, its daily average was N2.66 billion in 6 transaction days with the total Standing Deposit Facility of N0.09 billion, while the total Standing Deposit Facility granted during the review period was N726.98 billion with a daily average of N38.26 billion in 19 transaction.
The CBN said cost incurred on Standing Deposit Facility in the month of November, 2020 remained at N0.12 billion, while its daily request ranged from N31.30 billion to N45.10 billion.