Access, UBA, others borrow N7 trillion from CBN in 10 days Nexovant

• In the ten days of December 2024, banks and merchant banks borrowed an estimated N7.04 trillion from the Central Bank of Nigeria
• The interest rate at which these financial institutions borrow from the CBN has altered since the MPC of the CBN increased the MPR
• In the first eleven months of 2024, banks and merchant banks borrowed N114.6 trillion, according to CBN financial data

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

Banks and merchant banks borrowed an estimated N7.04 trillion from the Central Bank of Nigeria (CBN) in the ten days of December 2024 to meet customers’ demand as a result of increased commercial activity.

The interest rate at which these banks borrow from CBN has changed. Photo Credit: Contributor
Source: Getty Images

The Standing Lending Facility (SLF) is a line of short-term credit that Nigerian banks and merchant banks can access when they need to cover their customers’ immediate short-term withdrawals.

Since the CBN’s Monetary Policy Committee (MPC) raised the MPR, which is currently at 27.50%, the interest rate at which these financial institutions borrow from the CBN has changed.

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Data shows that financial institutions borrowed from the CBN during the first ten days of December 2024 at a rate of 32.50% rise, which was the asymmetric corridor surrounding the MPR at +500/-100 basis points.

Banks and merchant banks were borrowing from the CBN at a rate of 32.25% as of November 2024, when MPR was at 27.25% until it was raised to 27.50%.

According to information obtained by ThisDay from the CBN’s financial data, banks and merchant banks borrowed N114.6 trillion in the first 11 months of 2024, which is around 579 percent more than they borrowed in the same period in 2023 (N16.87 trillion).

Since the Monetary Policy Committee raised the Monetary Policy Rate this year, the interest rate at which these banks borrow from CBN has changed.

The CBN members decided to raise MPR to a record high of 27.50% at the end of the November 2024 meeting.

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CBN makes slight adjustments to Customs Exchange rate to clear goods

In keeping with its duty to address inflation and the uncertain value of the Naira on the foreign exchange market, the MPC members have so far in 2024 decided to raise interest rates from 18.75% to 27.50%.

In a circular, Dr. Omolara Duke, Director of the Financial Markets Department at the CBN, said that while the MPR was at 26.75%, the apex bank permitted banks to borrow at a rate of 31.75%.

Currency in circulation hits historic record

Legit.ng reported that as of August 2024, the Central Bank of Nigeria (CBN) reported that the amount of currency in circulation has increased to an all-time high of N4.3 trillion.

As the amount of money in circulation increased from N3.86 trillion in August to N4.02 trillion in September, Daily Trust reported that the currency outside of banks is also competing fiercely.

Read also

CBN data shows money supply above N100 trillion amid cash scarcity in banks

Currency in circulation is the total amount of money in a nation that is physically utilized for transactions between customers and businesses, whether in the form of coins or paper money.

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Source: Legit.ng

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