Nigeria banks borrowed a total of N4.5 trillion from the Central Bank of Nigeria (CBN) in July, compared with N3.6 trillion the previous month, representing a 27 per cent increase Month-on-Month.
Banks borrowing from the regulatory bank totalled N13.36 trillion in the first seven months of this year, compared with N17.9 trillion borrowed in the prior seven months of 2021.
The commercial lenders borrowed short-term funds from the Standing Lending Facility (SLF) to cover their position in a time of liquidity shortage.
While the CBN lends money to banks through the SLF at an interest rate of 100 basis points above the Monetary Policy Rate (MPR) currently at 14 per cent, it also lends money to banks through Repurchase Arrangement (Repo).
In the month under review, the CBN financial data shows that banks borrowing through the SLF dropped by 24.37 per cent MoM to N1.46 trillion in July, from N1.93 trillion in June, while borrowing through Repo arrangement rose sharply in July by 86.1 per cent MoM to N3.07 trillion from N1.65 trillion in June 2022.
Experts have expressed that the money market is getting tighter due to macro-economy headwinds.
They said the hike in the interest rate and rising inflation rates had forced many banks to patronise the CBN lending window, especially in July.