The SLF is a Monetary Policy Rate (MPR) at which Deposit Money Banks (DMBs) and discount houses can borrow money from the apex bank at a pre-specified rate.
There is also the Standard Deposit Facility (SDF) which is a lower corridor of the MPR at which DMBs and discount houses can deposit their money overnight with the CBN for an interest rate.
Further checks from the CBN’s Financial Data for January and February 2023, also showed that deposits made by banks in the SDF witnessed a 14 per cent increase from ₦584.79 billion in January 2023 to ₦668.86 billion in February 2023.
Analysts have traced the decline in the figures borrowed by banks during the period to the apex bank’s cash policy which has greatly reduced the cash in circulation due to its strategic plan to curb inflation and mop up a greater percentage of physical cash in circulation.
The policy also reduced the Currency Outside Banks (CoB) by 70 per cent as it dropped from ₦2.6 trillion in December 2022 to ₦788.9 billion in January 2023.
This is reflected in the CBN’s Money and Credit data which revealed that Nigerians deposited a whooping ₦1.81 trillion into the banking system in January 2023 in a bid to beat the CBN’s deadline to return all the old naira notes.
Recall the CBN had since rescinded this order after the Supreme Court ruled that all old notes affected by the CBN policy would remain legal tender till December 31, 2023.
Eyewitness? Submit your stories now via social or:
Email: eyewitness@pulse.ng
