The Central Bank of Nigeria (CBN) has lifted the suspension on lending to banks through its Standing Lending Facility (SLF). This was announced in a circular signed by Dr. Omolara Duke, the Director of the Financial Market Department. Along with this change, the CBN has also adjusted the lending rate to 31.75%.
Additionally, the CBN stated that commercial and merchant banks will earn a 19% interest rate on deposits exceeding N3 billion in its Standing Deposit Facility (SDF). The apex bank explained that the SLF rate adjustment follows the Monetary Policy Committee’s (MPC) decision to increase the upper corridor of the standing facilities from 1.00% to 5.00% around the Monetary Policy Rate (MPR) during its 296th meeting.
The CBN outlined that authorized dealers can now access the SLF at a 31.75% interest rate, and use the Intraday Lending Facility (ILF) to avoid system gridlock without cost if repaid on the same day. A 5.00% penalty will apply to participants who do not settle their ILF, with the system converting it to SLF at a 36.75% rate.
Moreover, the SDF has been adjusted to 31.75% for deposits up to N3 billion, and 25.75% for excess deposits. For Payment Service Banks, the SDF will be 25.75% for deposits up to N1.5 billion, and 19% for excess deposits above that amount.
Recently, it was reported that Nigeria’s monetary policy rate is the highest among 12 countries and Euro areas, with the most recent rate being raised to 26% from a previous 24%.
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