The Deposit Money Banks and merchant banks in the country borrowed N1.81tn from the Central Bank of Nigeria in the first quarter of the year. In April, they borrowed N274bn from the apex bank, thereby increasing the amount borrowed to N2.08tn in the first four months of the year, according to data obtained from the CBN.
According to CBN reports, the banks continued to access the standing facilities window to square up their positions.The trend at the CBN standing facilities window showed more frequency at the Standing Lending Facility window, as against the decreased patronage at the Standing Deposit Facility window.
CBN’s first-quarter economic figures showed that applicable rates for the SLF and SDF stood at 15.50 and 8.50 per cent respectively in March. Total request for the SLF during the first quarter of 2020 was N1.81tn, made up of N1.21tn direct SLF and N597.96bn intraday lending facilities.
Total interest earned at 15.50 per cent was N767.13bn. However, as more funds were made available to the banks, credit to the economy continued to grow.
The CBN stated in the report that credit to the private sector grew by 6.6 per cent in April, compared with 5.7 per cent in March, driven largely by other depository corporations’ credit, reinforcing the effectiveness of the Loan-to-Deposit ratio policy of the apex bank.