Nigeria: CBN Introduces Special Bills to Deepen Financial Market
As part of efforts to support economic recovery and deepen the financial market, the Central Bank of Nigeria (CBN) has introduced special bills.
The 90-day special bills are expected to avail the monetary authority additional liquidity management tool.
The CBN stated this in a circular addressed to all banks, dated December 1, 2020, signed by its Director, Banking Supervision, Mr. Bello Hassan, a copy of which was obtained by THISDAY yesterday.
It explained that the features of the special bills include tenor of 90 days, zero coupon, applicable yield at issuance to be determined by the CBN; the instrument will be tradable amongst banks, retail and institutional investors.
Also, it stated that the instrument shall not be accepted for repurchase agreement transactions with the CBN and shall not be discountable at the CBN window; and that the instrument will qualify as liquid assets in the computation of liquidity ratio for deposit money banks.
"The CBN will continue to ensure optimal regulation of systemic liquidity and promote efficient financial markets in support of economic recovery and sustained growth," it added.
Dealers, Analysts Welcome New Policy on Diaspora Remittances
Meanwhile, the Association of Bureau De Change Operators of Nigeria (ABCON) and some financial market analysts have expressed support for the new Central Bank of Nigeria (CBN) policy that grants unfettered access to forex from Diaspora and other money transfer remittances like Western Union and MoneyGram.
peaking in separate interviews with THISDAY, they stated that the new policy would enhance liquidity in the forex market.
ABCON President, Alhaji Aminu Gwadabe, advised forex speculators hoarding dollars to sell now, saying, "Otherwise they will lick their wounds."
According to him, with the new policy, the monopoly in the remittance market has been broken.
Gwadabe said: "If you were receiving dollars from the bank at about N390 to a dollar and now you are free to receive your dollar as it was sent, you are free to walk into any BDC operator and get it at the prevailing market rate... Read more on All Africa
Source: All Africa