Nigerian Deposit Money Banks (DMBs)’s patronage at the Central Bank of Nigeria (CBN)’s Standing Deposit (SDF) window increased to an average daily amount of ₦84.27 billion for the 246 transaction days in 2018, from ₦41.90 billion for the 230 transaction days in 2017.
The annual activity report released by the CBN on Tuesday showed that average daily interest payments on the deposits increased to ₦30.51 million in the review period, from ₦14.86 million in 2017.
The increased volume of transactions in the year was due to higher levels of banking system liquidity.
An analysis of the banks’ activities revealed banks accessed standing facilities to square-up their positions by borrowing at the Standing Lending Facility (SLF) or depositing excess funds at the Standing Deposit Facility (SDF) at the end of each business day.
The average daily request for Standing Lending Facility (SLF) was ₦48.44 billion in 234 transaction days, out of which Intraday Lending Facility (ILF) conversion averaged ₦30.43 billion, amounting to 62.82 per cent of average daily requests. The average daily interest charged was ₦35.81 million. In 2017, the average daily request for SLF was ₦216.34 billion in 246 transaction days, out of which ILF conversion was ₦130.63 billion or 60.38 per cent, while average daily interest income stood at ₦159.96 million.
The trend at the discount window showed less frequent recourse to the SLF, than in 2017 due to increased net system liquidity.
Meanwhile, the remunerable threshold for daily deposits per institution at the SDF remained ₦7.5 billion. This was to curtail unbridled requests by market participants and encourage lending to the real sector. Applicable rates for the SLF and SDF also remained 16.00 and 9.00 percent, respectively, same as in 2017. The rates were anchored to the Monetary Policy Rate (MPR).
The total value of Nigerian Treasury Bills NTBs issued and allotted was ₦3.3 trillion each, indicating a decline of ₦1.2 trillion or 25.65 per cent below the level in 2017.
The decrease was attributable largely to lower NTBs issued coupled with the redemption of treasury bills worth ₦78.05 billion in December 2018 as the Government indicated its preference for cheaper and longer tenored foreign debt.
Total public subscription stood at ₦6.7 trillion, compared to ₦7.2 trillion in 2017. The lower level of public subscription was traceable to the high patronage at Open Market Operation (OMO) auctions.
The structure of allotment of the instrument indicated that banks (including foreign investors) took up ₦1.8 trillion or 52.76 per cent, mandate and internal funds ₦1,508.18 billion or 45.12 per cent and merchant banks ₦70.73 billion or 2.12 percent. There was no CBN take-up in the period under review.
The stop rates, in 2018, ranged from 10.00 to 12.55 per cent for the 91-day, 10.30 to 13.93 per cent for the 182-day and 10.70 to 14.45 per cent for the 364-day tenors. The range of stop rates in 2017 were between 12.95 and 14.00 per cent for the 91-day, 15.00 and 17.50 per cent for the 182-day and 15.57 and 18.98 per cent for the 364-day tenors.