CBN lifts suspension on Standing Lending Facility, implements new rates
CBN Building
CBN lifts suspension on Standing Lending Facility, implements new rates
Abdullateef Fowewe
The Central Bank of Nigeria has lifted suspension on Standing Lending Facility (SLF) and released two new circulars to implement its adjusted SLF and Standing Deposit Facility for banks.
It stated this in a circular which was obtained by Dailyeconomy, and signed by the Director, Financial Markets Department, Omolara O. Duke (Ph.D.), to authorised dealer with the number FMD/DIR/PUB/CIR/001/016, titled, ‘The standing lending facility to be 31.75% as approved at the 296th meeting of the Monetary Policy Committee.
It noted that the Monetary Policy Committee (MPC) adjusted the upper corridor of the standing facilities to 5.00 per cent from 1.00 per cent around the MPR, at its 296th meeting.
“Consequently, the suspension of the Standing Lending Facility (SLF) is hereby lifted and Authorised Dealers should send their request for SLF through the Scripless Securities Settlement System (S4) within the operating hours of 5.00pm to 6.30pm,” it added.
To this end, Authorised Dealers are, “Permitted to access the SLF at 31.75 per cent; Permitted to access ILF to avoid system gridlock at no cost if repaid the same day;
“The 5.00 per cent penalty (as stated in the S4 business rules) is retained, for participants that do not settle their ILF, which the system will convert to SLF at 36.75 per cent.
“Collateral execution (the rediscounting of instruments pledged by participants at the penal rate by CBN) is reintroduced as stipulated in the approved repo guidelines.”
In another circular with the number FMD/PUB/CIR/001/017, to authorised dealers titled, ‘Operationalisation of the Standing Deposit Facility Asymmetric corridor, it stated that pursuant to sections 12 and 30 ofthe CBN Act 2007, the Monetary Policy Committee (MPC),at its 296′ meeting adjusted the Asymmetric Corridor to +500/-100bps from +100/-300bps around the Monetary Policy Rate (MPR).
“The Standing Lending Facility was adjusted to 31.13% while the Standing Deposit Facility to 25.75%. The adjustment of the SDF will be operationalized as follows:
“Commercial and Merchant Banks: 25.75% for deposit up to N3.00billion; 19.00% for excess deposits above the initial N3.00 billion.”
“Payment Service Banks: 22.73% for deposit up to N1.50 billion; 19.00% for excess deposits above the initial N1.50 billion.”
The circulars take immediate effect.
