Connect with us
Adron Homes Properties

Business

CBN Raises Standing Deposit Facility Rate to Control Liquidity

Published

on

IFC and CBN Forge Partnership to Enhance Local Currency Financing in Nigeria

The Central Bank of Nigeria has raised the Standing Deposit Facility (SDF) rates as part of its continuous attempts to control liquidity in the banking sector.

This became necessary after currency in circulation (CIC) reached an all-time time of N4.04 trillion in June 2024.

The Money and Credit Data released by CBN also showed that currency outside banks settled at N3.79 trillion, also a historical high and 93.6 per cent of money in circulation.

However, following the approval of significant changes to interest rate policy at the 296th Monetary Policy Committee (MPC) meeting, a circular signed by Omolara Duke, Director Financial Markets Department outlining this decision was released on Monday August 26, 2024.

“The Monetary Policy Rate (MPR) Asymmetric Corridor was adjusted by the CBN from +100/-300 basis points (bps) to +500/-100 bps. With this big change, the central bank hopes to deter banks from hoarding surplus cash and encourage more lending.The Standing Lending Facility (SLF) rate, which banks use to borrow short-term funds from the CBN, has been raised to 31.75%.

“The SDF rate, applicable to deposits made by banks at the CBN, has been increased to 25.75%” the circular stated.

The circular also specifies that:

“Commercial and Merchant Banks will receive 25.75% on deposits up to ₦3.00 billion, while deposits exceeding this amount will attract a lower rate of 19.00%.

“Payment Service Banks will receive 25.75% on deposits up to ₦1.50 billion, with amounts above this threshold earning 19.00%.

“These new rates are effective immediately, with all authorized dealers expected to adhere to the updated guidelines” the circular stated.

To Advertise or Publish a Story on WordSpired:
Kindly contact us @ info[@]wordspired.com.ng
Call or Whatsapp: +234 803 951 2443, +234 902 474 4290
Continue Reading
Advertisement Adron Homes Properties
Comments

Trending