In October 2023, banks’ borrowings from the Central Bank of Nigeria’s (CBN) Standing Lending Facility (SLF) surged by 466% YoY, reaching N268.3 billion, compared to N47.35 billion in October 2022. This increase is a result of the rising amount of currency held outside of banks.
The CBN offers two short-term lending options for banks and merchant banks, namely the SLF and Repurchase (Repo) lending. According to CBN Money and Credit Statistics data, currency outside of banks amounted to N2.35 trillion as of September 2023, marking a 195% increase since January 2023, when it had dropped to N792.18 billion due to the redesign of N200, N500, and N1000 notes.
Additionally, data from CBN Financial statistics revealed a 465% YoY increase in banks’ deposits in the CBN Standing Deposit Facility (SDF), reaching N5.29 trillion by the end of October 2023, compared to N935 billion in October 2022.
In contrast, the CBN’s foreign exchange sales to the Nigerian Foreign Exchange Market (NAFEM), Small and Medium Enterprises (SMEs), and Invisibles decreased by 121% YoY in the second quarter of 2023 (Q2’23), dropping to $2.92 billion from $3.7 billion in Q2’22. These figures were reported in the CBN’s quarterly statistical bulletin for June 2023.
A breakdown of foreign exchange sales in Q2’23 showed that the CBN sold $1.2 billion in April, with a 15.8% decline to $736.98 million in May, followed by a 27% increase to $939.39 million in June.