System liquidity refers to the overall availability of cash and liquid assets in the banking sector, indicating how much money is circulating in the financial system and affecting banks’ ability to lend and invest.
A standing lending facility is a provision by the central bank allowing commercial banks to borrow money short-term to manage liquidity.
Also, banks deposit excess reserves with the central bank and earn interest through the Standing Deposit Facility.
Consequently, the overnight policy rate and overnight negotiated rates declined, closing the week at 29.70 per cent and 29.97 per cent, respectively, down from 31.20 per cent and 31.73 per cent in the previous week.
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