Nigerian commercial banks and merchant banks have reportedly increased their borrowing from the Central Bank of Nigeria, CBN, for liquidity in the last eight months of 2023.
According to CBN data, between January and July 2023, commercial banks and merchant banks borrowed a total of N12.46tn from the CBN.
In the first eight months of 2022, financial institutions had borrowed N6.96tn from the central bank, representing an increase of 79 per cent.
Commercial banks and merchant banks access lending from the apex bank using the Standing Lending Facility (SLF) window and deposit cash with the apex bank using the Standing Deposit Facility window(SDF).
According to findings, banks during the first eight months of 2023 accessed the SLF window against the backdrop of CBN’s tightening monetary policy stance.
The apex banking regulating body has the SLF, a short-term lending window for commercial banks and merchant banks, to access liquidity to run their day-to-day business operations.
The CBN data further revealed that in the first half of 2023, commercial banks and merchant banks borrowed N10.25tn from the CBN via the SLF window, an increase of 138 per cent Year-on-Year (YoY) from N4.3tn borrowed during the corresponding period of H1 2022.
The CBN data showed that the first quarter figure, which stood at N4.95tn, was higher than the half-year data for 2022.
The monthly breakdown revealed that commercial banks and merchant banks in January borrowed N528.16bn from the CBN, but the figure dropped to N453.7bn in February 2023.
In March, it rose significantly by 776.22 per cent to N3.98tn, the second highest after the N4.47tn recorded in April 2023.
However, the CBN data showed N590.29bn and N235.06bn borrowing for May and June 2023.
In addition, SLF’s figure stood at N908.43bn in July and N1.3tn in August.