Nigerian banks significantly reduced their reliance on financing from the Central Bank of Nigeria (CBN) in August, with the amounts raised through its Standing Lending Facility (SLF) falling by nearly 89% in one month.
Borrowings from this window fell to 126 billion nairas (93.8 million USD) in August, down from 1,190 billion nairas (885.7 million USD) in July, according to the latest CBN data.
The SLF allows banks to obtain short-term liquidity from the central bank. Its rate is set at 5 percentage points above the benchmark rate, which was maintained at 26.5% at the last monetary policy meeting.
Banks also placed 82.990 billion nairas (61.8 billion USD) with the CBN through the Standing Deposit Facility (SDF), down from 83.950 billion nairas (62.5 billion USD) in July, a decrease of 1.14%.
The central bank also uses repo operations and OMO securities auctions to manage monetary conditions and available resources in the banking sector.
The sharp decrease in drawdowns on the SLF reflects a reduction in banks’ use of this short-term financing mechanism during the month of August.
