TUE AUG 27 2024-theGBJournal| The Central Bank of Nigeria (CBN) announced Monday the lifting of the suspension on the Standing Lending Facility (SLF), a critical tool used by banks to manage their short-term liquidity needs.
The suspension takes immediate effect.
The suspension follows the adjustment made by Monetary Policy Committee (MPC) on key interest rates, including adjustment of the upper corridor of the SLF to 5 percent from 1 percent around the Monetary Policy Rate (MPR), at its 296th meeting
In the circular to Authorized Dealers, the CBN requested the Dealers to send their request for SLF through the scripless Securities Settlement System (S4) within operating hours of 5.00pm to 6.30pm.
The Authorized Dealers, according to the CBN are permitted to access the SLF at 31.75 percent, a significant increase from the previous level. The Dealers are also to access the Intraday Liquidity Facility (ILF) at no cost if repaid the same day.
The Standing Deposit Facility (SDF) is also adjusted to 25.75 percent, and will be operationalized as follows;
Commercial Banks and Merchant Banks
25.75 percent for deposit of up to N3 billion and 19 percent for excess deposits above the initial N3 billion.
Payment Service Banks
25.75 percent for deposits up to N1.50 billion and 19 percent for excess deposits above the initial N1.4 billion.
The CBN warned that a 5 percent penalty will be imposed (as stated in the S4 business rules) as retained, for participants that do not settle their ILF, which the system will convert to SLF at 36.75 percent.
The CBN also reintroduced collateral execution (the rediscounting of instruments pledged by participants at the penal rate by CBN), as stipulated in the approved repo guidelines.
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