By Babajide Komolafe
The Central Bank of Nigeria (CBN) has introduced a special bill to mop up excess liquidity (idle cash) in the economy.
Announcing the introduction of the special bills, Bello Hassan Director of Banking Supervision Department, CBN, said that the bills will be 90Days tenor and will be issued at zero-coupon.
He said: “The Central Bank at 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.
“The features of the CBN Special Bills are as follows: 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.
“The CBN will continue to ensure optimal regulation of systemic liquidity and promote efficient financial markets in support of economic recovery and sustained growth.”