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CBN Special Bill will promote liquidity
The Central Bank of Nigeria has introduced a special bill as a means to further deepen the financial market in 2020 and to provide more liquidity management tool to the monetary authority.
Considering its economic responsibility and monetary policy, the CBN special bill will help increase the ratio of the money supply to the GDP while opening opportunities for growth.
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According to the statement from the CBN “The Central Bank of Nigeria (CBN) hereby announces the introduction of Special Bills as part of efforts to deepen the financial markets and avail the monetary authority with an additional liquidity management tool.”
CBN Special Bills comes with these features:
I. A Tenor of 90 days
II. Zero coupon, as the applicable yield at issuance will be determined by the CBN.
III. The instrument will be tradable amongst banks, retail and institutional investors.
IV. The instrument shall not be accepted for repurchase agreement transactions with the CBN and shall not be discountable at the CBN window.
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V. The instrument will qualify as liquid assets in the computation of liquidity ratio for deposit money banks.
The Director of Banking Supervision of CBN, Bello Hassan, signed the statement from CBN which points at Nigeria’s recovery from 2020 recession. It also says that “the CBN will continue to ensure optimal regulations of systemic liquidity”. More so, “it will prompt efficient financial markets in support of economic recovery and sustained growth”.
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