The Central Bank of Nigeria (CBN) has announced the introduction of some special bills to mop up idle cash in the financial institution reserves, and to avail Nigerians alternative Investment options.
According to the disclosure signed by the Director of Banking Supervision of the Apex bank, Bello Hassan, the introduction of the special bills is part of the Apex bank’s efforts to:
“deepen the financial markets and avail the monetary authority with an additional liquidity management tool.”
Some of the key features of the special bills are:
- Tenor of 90 days;
- Zero coupon, applicable yield at issuance will be determined by the CBN;
- The instrument will be tradable amongst banks, retail and institutional investors;
- The instrument shall not be accepted for repurchase agreement transactions with the CBN and shall not be discountable at the CBN window; and
- The instrument will qualify as liquid assets in the computation of liquidity ratio for deposit money banks.