The country’s banks can now resume using the standing lending facility, and the Central Bank of Nigeria (CBN) has set interest rates on deposits between 19 and 25.75 percent.

The move came after the most recent Monetary Policy Committee (MPC) meeting, where the apex bank adjusted its asymmetric corridor.The MPC increased the monetary policy rate by 50 basis points to 26.75 percent from 26.25 percent at its most recent meeting in July.

Other parameters remained the same, while the asymmetric corridor around the MPR was modified to +500/-100 from +100/-300 basis points.

The apex bank stated that the interest rate on deposits will be dependent on the amount deposited in a circular signed by THE Director, Financial Markets Department, Dr. Omolara Duke, and sent to all authorized dealers.

The circular states that deposits up to N3 billion will earn commercial and merchant banks up to 25.75 percent interest, while deposits over N3 billion will get 19 percent interest.

Payment Service Banks (PSBs) would receive 25.75 percent interest on deposits up to N1.5 billion, and 19 percent interest on deposits over N1.5 billion. “The suspension of the Standing Lending Facility (SLF) is hereby lifted and Authorized Dealers should send their request for SLF through the Scripless Securities Settlement System (S4) within the operating hours of 5.00pm to 6.30pm,” the CBN stated in response to the asymmetric corridor adjustment. As a result, banks are allowed to borrow at a rate of 31.75 percent through the SLF window from the CBN.

The circular noted that authorised dealers are now “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.”