Borrowing from Central Bank of Nigeria (CBN) by Nigerian banks rose by 52 per cent in one week, attributable to liquidity scarcity and banks demand for funds to participate in the special foreign exchange (FX) auctions conducted by the apex banking regulating body.
Commercial banks operating in the country last week, borrowed N870.9 billion from CBN, as against N574 billion in previous week.
Eyes Of Lagos investigations using the Standing Lending Facility (SLF) revealed that commercial Banks in November had borrowed N2.77 trillion with an average amount of N154 billion.
The highest and lowest amount commercial banks have borrowed so far this month was N260 billion and N108 billion respectively.
Banks use the CBN’s SLF to support their liquidity shortfalls and meet trading obligations on short term basis.
Finance experts told Eyes Of Lagos that CBN’s lending to banks has increased of recent on the heels of illiquidity in the economy.
Meanwhile, the Investors & Exporters Foreign Exchange (IEFX) widow recorded total turnover trade of $1.06 billion in one week, between Monday 20 November and Friday 24 November 2017.
The Naira, at the end of Friday sustained the slightly appreciated rates declared on Thursday against the three foreign currencies across the forex markets, as the apex bank continued to bridge the gap between parallel market and official market rates with injections of $287.89 million to meet request for industries, while extending efforts to boost liquidity and alleviate shortages.
The IEFX, at the beginning of the week under review declared total transacted figure of $346.36 million, representing the second highest turnover in the week, and better than $266.41 million sold in the corresponding period last week, but recorded the lowest for the week on Tuesday with $78.48 million traded figure.
At the close of Wednesday trading activities, the mid-week trading closed at a rebounded figure of $234.23 million turnover, compared to $96.43 million stood last Tuesday.
Although, it relapsed the following day to close at $214.84 million, weaker than $359.53 million sold on a week ago and dropped further to close the week at $179.78 million, compared to $346.36 million transacted the previous Friday.
The local currency, Naira, over the weekend stood steadied against the three major foreign currencies at N475 to the Pound the same rate it was exchanged since the mid-week, and N425 to the Euro at the parallel market.
The local currency, also, remained unchanged at N364 per dollar at the unofficial forex, but closed high at the unofficial FX market at N305.85 stronger than N305.90 sold on Thursday.
Speaking to the some selected journalists on the sideline of a workshop organised by the Nigeria Deposit Insurance Corporation (NDIC) for business editors and reporters of the Finance Correspondents Associations of Nigeria (FICAN) in Kano, chairman House Committee on Insurance & Actuarial Matters, Honorable Olufemi Fakeye, said, “As far as I know the Naira is not floating, but still managed. I think they just want to assure that at N360 against the Dollar, for people that are not critical to the economy.
“For instance, I’m important to the economy but not critical because I’m not a manufacturer, whose factory might go down because he couldn’t get raw material.
“So, if they ask me to go and pay N360 to gets a dollar for children studying in abroad, I think that is fair enough but for a manufacturer, if you say to him the same thing, he might let go of all his manufacturing staff, the lower the rate for them, the better for government activities.”
