Nigerian deposit money banks (DMBs) raised N2.8 trillion from the Central Bank of Nigeria (CBN) standing lending facility to close funding gap, investment firm said in an emailed note.
The local lenders flocked the CBN lending window to borrow funds to satisfy their daily liquidity requirement amidst double digits rate pricing. The short term cash shortage has made local lenders net borrowers but some banks with huge liquidity also made deposit at the deposit window.
Analysts reported that financial system liquidity improved at the closed higher on Friday compared to the previous week, supported by OMO maturities and FGN bond coupon inflows.
The amount in the financial system increase strongly as inflows from FGN bond coupon payments worth N402.96 billion saturated the system, said Cordros Capital Limited.
For most part of the week, liquidity was negative, with most Deposit Money Banks (DMBs) relying on CBN’s standing Lending Facility (SLF) to fund their operations, AIICO Capital Limited revealed.
Due to borrowing by the commercial banks, liquidity level in the money market inched higher by 62.4 per cent week on week to close at N1.2 trillion, Afrinvest Limited said in a note.
Investment banking firms anticipate sufficient system liquidity in the new week due to FGN bond coupons and FAAC inflows. However, debits from NTB and FGN bond auctions may further exacerbate the liquidity situation.
