A Review of the Nigerian Energy Industry

Total deposits at CBN fall by 2.9%

31 December 2014, Abuja – The total deposits at the Central Bank of Nigeria declined by 2.9 per cent to N6.683tn during the third quarter of 2014, the CBN stated in a new report.

This was in contrast to the one per cent increase recorded at the end of the second quarter

CBN headquarters.
CBN headquarters.

The CBN Third Quarter Economic Report, posted on its website, stated that the development reflected, largely, the 9.6 per cent fall in Federal Government deposits, which more than offset the 3.4 per cent and 4.4 per cent increase in the deposits of banks and ‘others’, respectively.

Of the total deposits, the shares of the Federal Government, banks and ’others’ were N3.04tn (45.6 per cent), N 3.334tn (49.9 per cent) and N3.01tn (4.5 per cent), respectively.

The central bank stated that the reserve money, at N4.88tn, also rose by 3.4 per cent, in contrast to the 6.2 per cent decline recorded at the end of the preceding quarter.

The development, relative to the level at the end of the preceding quarter, was attributed to the increase of 3.4 per cent apiece-in its currency and demand deposit components.

Also, at N1.548tn, currency-in-circulation rose by 3.4 per cent at the end of the third quarter, compared with the increase of 3.4 per cent at the end of the corresponding quarter of 2013.

The CBN report read in part, “Subsidy Reinvestment & Empowerment Programme, as well as payments of Joint Venture Cash calls to oil partners, net inflows through Cash Reserve Requirements and repayment of matured federal government securities were the source of liquidity flows during the review quarter.

“Open Market Operations was deployed to moderate the level of liquidity in the system. Patronage of the Federal Government securities was quite remarkable during the quarter. Money market rates reflected the liquidity condition in the system.

“Inter-bank call and Open Buy Back rates were low and stable for most of the period except for slight changes in the movement of rates triggered by liquidity shortages in the period when NNPC withdrawals impacted the system.

The CBN report further said provisional data had indicated that the total value of money market assets outstanding at the end of the third quarter of 2014 stood at N7.406tn.

This it said showed an increase of 2.9 per cent, compared with the increase of 4.2 per cent at the end of the preceding quarter.

The development was attributed largely to the 5.3 per cent and 4.4 per cent increases in the FGN bonds and Bankers’ Acceptance, respectively.

The report said, “Available data indicated that banks’ deposit and lending rates trended downward during the third quarter of 2014. Similarly, at 8.20 per cent, the average term deposit rate declined by 0.44 percentage point below its level in the preceding quarter.

“The maximum and prime lending rates also fell by 0.18 and 0.08 percentage point below their levels in the preceding quarter to 25.64 and 16.49 per cent, respectively. Consequently, the spread between the weighted average term deposit and maximum lending rate widened by 0.26 percentage point to 17.44 per cent from 17.18 per cent in the preceding quarter.”


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