In less than three months, covering January to last week, deposit money banks (DMBs) drew N24.13 trillion from the Central Bank of Nigeria (CBN) through the discount window to meet short-term obligations, a trend that points to some liquidity gap in the financial system.
In less than three months, covering January to last week, deposit money banks drew N24.13 trillion from the Central Bank of Nigeria through the discount window to meet short-term obligations, a trend that points to some liquidity gap in the financial system.
From towards the end of last year, activities in the window, which allows both CBN and DMBs to access funds to meet short-term obligations, have increased significantly. Analysis of data obtained from the apex bank’s financial updates yesterday shows the SLF and SDF trends had pivoted last year with the relationship becoming one-way.
The current situation mimics the 2022 data. Then, the discount window closed with a net SLF of N11.54 trillion, which was about 3.5 times what the banks deposited with the CBN as excess liquidity. Worsening economic downturn and attendant hunger may have widened the floodgate of activities for digital money lenders, with many loan sharks targeting poor and vulnerable Nigerians.In less than three months, covering January to last week, deposit money banks drew N24.13 trillion from the Central Bank of Nigeria through the discount window to meet short-term obligations, a trend that points to some liquidity gap in the financial system.
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