The Central Bank of Nigeria (CBN) has announced lifting the suspension on its Standing Lending Facility for authorized dealers. Standing Facilities are tools used by the CBN to regulate money supply and liquidity as part of its monetary policy objectives. The Standing Lending Facility specifically allows banks to borrow from the CBN.
According to a circular signed by Omolara Duke, Director of the Financial Markets Department, the decision to lift the suspension aligns with the recent Monetary Policy Committee (MPC) meeting, which adjusted the upper corridor of the standing facilities to 5.00 percent from 1.00 percent above the Monetary Policy Rate (MPR).
During the same meeting, the MPC also raised the MPR to 26.75 percent.
“Consequently, the suspension of the Standing Lending Facility is hereby lifted and Authorised Dealers should send their request for SLF through the Scripless Securities Settlement System (S4) within the operating hours of 5.00 pm to 6.30 pm,” part of the statement read.
Providing details, the apex bank circular indicated that Authorised Dealers are permitted to access the SLF at 31.75 percent and to access ILF to avoid system gridlock at no cost if repaid the same day.
Also, “The 5.00 per cent penalty (as stated in the S4 business rules) is retained, for participants who do not settle their ILF, which the system will convert to SLF at 36.75 per cent,” the circular continued.
In a separate circular issued on Monday, the Central Bank of Nigeria (CBN) announced that the adjusted Standing Facilities for banks are now in effect.
The Standing Lending Facility rate, which banks use to borrow short-term funds from the CBN, has been raised to 31.75 percent. Meanwhile, the Standing Deposit Facility rate, which applies to deposits made by banks at the CBN, has been increased to 25.75 percent.
The circular further detailed that Commercial and Merchant Banks will earn 25.75 percent on deposits up to N3 billion, while deposits exceeding this amount will receive a lower rate of 19 percent. Payment Service Banks will also receive 25.75 percent on deposits up to N1.50 billion, with amounts above this threshold earning 19 percent.
