DBMs, merchant banks deposit N606.90bn with CBN in October
Deposit Money Banks (DMBs) and merchant banks deposited N606.90billion with Central Bank of Nigeria (CBN) in October 2020.
The apex bank revealed this in its monthly economic report for October 2020, which was posted on its website.
DMBs and merchant banks continued to access the Standing Facilities window to square their liquidity positions in October 2020.
The trend at the CBN standing facilities window showed more frequency at the Standing Deposit Facility (SDF) segment, due to improved liquidity in the banking system.
Applicable rates for the SLF and SDF stood at 12.5 per cent and 4.5 per cent, respectively.
According to the report, “A total of N606.90 billion was placed at the SDF during the review period, with a daily average of N35.70 billion in 17 transaction days during the same period.
“Daily request ranged from N13.00 billion to N50.00 billion. Cost incurred on SDF in the month stood at N0.11 billion.
“Total request for the SLF granted from October 1-26, 2020 was N34.54 billion.
“This entirely constituted Intraday Lending Facilities (ILF) converted to overnight repo, as there was no request for direct SLF. Daily average was N1.64 billion in 5 transaction days from October 1-26, 2020.
“Total interest earned was N0.45 billion.”
The report stated that there was ample liquidity in the banking system that improved financial intermediation in October.
According to the report repayments of matured CBN bills, Federal Government (FGN) bonds and Nigerian Treasury bills, as well as, fiscal disbursements to the three tiers of Government (FAAC) were the major sources of liquidity in the banking system during the review period.
The report said, “The Bank intervened to moderate liquidity in the banking system through OMO and discount window activities in October 2020.
“The tenors of the instruments were from 91 to 364 days. Total amount offered, subscribed and alloted, were N480.52 billion, N753.88 billion and N480.52 billion, respectively, with a bid rate of 8.0 per cent, while the stop rate was 8.1 per cent.
“Repayment of matured CBN bills stood at N1,319.90 billion, translating to a net injection of N839.38 billion through this medium.
“At the Government securities market, NTBs and long-term FGN Bonds were issued at the primary market on behalf of the Debt Management Office (DMO). NTBs of 91-, 182- and 364-day tenors, amounting to N124.88 billion, N618.09 billion and N124.88 billion, respectively, were offered, subscribed and allotted.
“The bid-cover ratio of 2.6 for 91-day, 9.9 for 182-day and 5.0 for 364-day tenor, reflected investors preference for instruments with medium-to-long-term maturities. There was no repayment of matured NTBs during the review period.
“FGN Bonds of 15- and 25-year tranches were reopened and offered for sale in the review period. Term to maturity of the Bonds ranged from 14 years, 5 months to 24 years, 9 months.
“Total amount offered, subscribed and allotted, were N30.00 billion, N235.87 billion and N45.00 billion, respectively. Allotment on non-competitive basis was N5.00 billion. The bid and marginal rates on all tenors were 8.3 per cent and 5.5 per cent, respectively.
