ENUGU, Nigeria (VOICE OF NAIJA)- The Central Bank of Nigeria (CBN) has witnessed a remarkable increase in banks’ borrowings from its Standing Lending Facility (SLF), with a staggering 466 per cent year-on-year surge, amounting to N268.3 billion as of the end of October 2023, compared to N47.35 billion in October 2022.
This surge is indicative of the expanding currency reserves held outside banks.
The apex bank administers two short-term lending mechanisms for banks and merchant banks, namely the SLF and Repurchase (Repo) lending.
According to data from the CBN Money and Credit Statistics, the amount of currency held outside banks reached N2.35 trillion in September 2023, reflecting a substantial 195 per cent increase since January 2023 when it had declined to N792.18 billion, primarily due to the introduction of redesigned N200, N500, and N1000 notes.
READ ALSO: CBN Approves Parallex Bank As Authorized NESS Fee Collector
Furthermore, the CBN Financial data revealed that banks’ deposits in the CBN Standing Deposit Facility (SDF) surged by 465 per cent year-on-year, reaching N5.29 trillion by the end of October 2023, in contrast to N935 billion in October 2022.
Meanwhile, the CBN reported a 121 per cent year-on-year decrease in foreign exchange sales to the Nigerian Foreign Exchange Market (NAFEM), Small and Medium Enterprises (SMEs), and Invisibles in the second quarter of 2023 (Q2’23), totaling $2.92 billion, down from $3.7 billion in Q2’22. This data is presented in the CBN’s quarterly statistical bulletin for June 2023.
Breaking down the foreign exchange sales for the months within Q2’23, the CBN sold $1.2 billion in April. In May, foreign exchange sales experienced a 15.8 per cent decline to $736.98 million, but rebounded in June, increasing by 27 per cent to $939.39 million.