Nigeria has witnessed a dip by 33.2 percent in the borrowing by financial institution from the Central Bank of Nigeria (CBN).
The drop in borrowing is attributed to the improvement in business activity in the country.
The borrowing dropped to N505.3billion in October as against N756.37billion in September 2021.
Commercial and merchant banks often depend on CBN for short-term liquidity needs to support their lending to the real sector in the event of scarcity of liquidity in the interbank money market.
The CBN lends money to commercial and merchant banks through the Standing Lending Facility (SLF) at interest rate of 100 basis points (bpts) above the 11.5 per cent Monetary Policy Rate (MPR).
The industry had in first half of 2021 faced liquidity crises as commercial and merchant banks aggressively borrowed from the CBN.
