Banks’ borrowings from the Central Bank of Nigeria, CBN, Standing Lending Facility, SLF, rose year-on-year (YoY) by 464 percent to N4.95 trillion in the first quarter of 2023 (Q1’23) from N877 billion in the corresponding period of 2022, Q1’22.
The data also showed that banks’ deposits in the apex bank’s Standing Deposit Facility, SDF, rose YoY by 26 percent to N1.72 trillion in Q1 ’23 from N1.36 trillion in Q1’22.
The rise in banks’ borrowings from the SLF contradict the mopping up of cash into the banking system during the period following the CBN’s cashless policy measure.
Recall that the CBN redesigned the N200, N500 and N1,000 notes and set a deadline for the old notes to cease being legal.
During the period, the CBN Money and Credit data for January showed that Nigerians in response to the initial deadline, deposited N1.81 trillion into the banking system in January.
Consequently, Currency Outside Banks, CoB, fell month-on-month (MoM) by 70 per cent to N788.9 billion in January 2023 from N2.6 trillion in December 2022.
CoB rose to N843 billion in February and N1.44 trillion in March. Similarly, in April CoB increased to N2.07 trillion.
