The Central Bank of Nigeria (CBN) has announced the lifting of its suspension on bank borrowing from its Standing Lending Facility (SLF). This decision follows the 296th meeting of the Monetary Policy Committee (MPC), where it was also decided to set the lending rate at 31.75%.
Omolara Duke, Director of the Financial Markets Department, outlined the changes in a statement dated August 26, 2024. She explained that the MPC adjusted the upper corridor of the standing facilities to 5.00% from 1.00% around the Monetary Policy Rate (MPR). As a result, the suspension on SLF borrowing is now lifted. Authorized dealers are instructed to submit their SLF requests through the Seamless Securities Settlement System (S4) during the operating hours of 5 pm to 6:30 pm.
Duke also highlighted that authorized dealers can access the SLF at 31.75%, with the option to avoid system gridlock by accessing the Intraday Liquidity Facility (ILF) at no cost, provided it is repaid on the same day. However, a 5% penalty remains for those who do not settle their ILF, with the amount converted to SLF at a higher rate of 36.75%. Additionally, collateral execution will be reintroduced as per the approved repo guidelines.
