By Chika Otuchikere
A Central Bank of Nigeria (CBN) Economic Report for the fourth quarter has shown that commercial Banks’ three-month total loan requests from the Central Bank of Nigeria (CBN) stood at N11.73 trillion as at last December.
The loan requests, which emanated in the form of Standing Lending Facility (SLF), including the Intra-day Lending Facilities (ILF), were made up of N7.26 trillion direct SLF and N4.46 trillion ILF converted to overnight rate.
The SLF is an overnight CBN credit made available on banking days between 2 pm and 3.30 pm, with settlement done on same day value. Funds were sourced mainly from time, savings and foreign currency deposits, as well as accretion to unclassified assets. The funds were used, largely, to extend credit to the private sector and payment of claims on demand deposit.
The economic report showed that the banks continued to access the CBN’s Standing Facilities window to square up their positions either by borrowing from the SLF window or depositing excess reserves at the standing deposit facility (SDF) window of the CBN at the end of each business day.
According to the report, the daily average for the 59 transaction days, from last October 1 to December 27 was N198.88 billion, with daily request ranging from N67.35 billion to N383.53 billion.
Moreover, the total interest earned was N8.04 billion. The SLF was at its peak last October 10, Subscription for Federal Government of Nigeria (FGN) Bonds of various maturities were reopened in the fourth quarter of last year.
The total Standing Deposit Facility (SDF) granted during the review quarter was N2.49 trillion with a daily average of N45 billion, compared with N1.53 trillion in the preceding quarter. The daily transaction ranged from N0.35 billion to N137.85 billion while interest payment on SDF in the review quarter was N0.89 billion, compared with N0.52 billion, at end-September 2017.
Activities at the CBN standing facility window revealed that there was more patronage at the SLF window. Applicable rates for the SLF and SDF remained at 16 per cent and nine per cent. Also, the total assets and liabilities of the commercial banks stood at N34.5 trillion within the period, representing 3.9 per cent increase over the level at end-September 2017.
The report affirms that funds were sourced, mainly, from reduction of claims on the Federal Government and mobilisation of demand, time, savings and foreign currency deposits. The funds were used to increase claims on the CBN and the private sector, acquire foreign assets, increase accretion to reserves and reduce unclassified liabilities.
At N20.4 trillion, banks’ credit to the domestic economy, fell by 5.5 per cent, below the level at end-September 2017. The development indicate the decline in claims on the Federal Government and the private sector in the reviewed quarter.