By Stanley Onyeka, Lagos
The Central Bank of Nigeria (CBN) has announced the lifting of the suspension on its Standing Lending Facility (SLF), which it uses to manage excess liquidity for authorised dealers.
Also, all authorised dealers are to submit their SLF requests via the Scriptless Securities Settlement System (S4) between 5:00 pm and 6:30 pm.
This is contained in a circular signed by the bank’s Director, Financial Markets Department, Omolara Duke, who said that Dealers may also access the Intraday Liquidity Facility (ILF) at no cost, provided it is repaid on the same day.
It explained that the suspension was lifted following the decision taken at the last Monetary Policy Committee (MPC) meeting, which adjusted the upper corridor of the standing facilities to 5.00% from 1.00% around the Monetary Policy Rate (MPR).
The circular reads further: “Consequently, the suspension of the Standing Lending Facility is hereby lifted and Authorised Dealers should send their request for SLF through the Scripless Securities Settlement System (S4) within the operating hours of 5.00 pm to 6.30 pm.”
The Authorised Dealers are now permitted to access the SLF at 31.75% and the ILF to avoid system gridlock at no cost if repaid the same day.
Also, “The 5.00% penalty (as stated in the S4 business rules) is retained, for participants who do not settle their ILF, which the system will convert to SLF at 36.75%,” the circular said.
The apex bank has also reintroduced collateral execution, which involves the rediscounting of instruments pledged by participants at the panel rate, as outlined in the approved repo guidelines.
Consequently, the suspension of the Standing Lending Facility is hereby lifted and Authorised Dealers should send their request for SLF through the Scripless Securities Settlement System (S4) within the operating hours of 5.00 pm to 6.30 pm.
