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Nigeria rolls out special bills to boost financial market

The instrument is not applicable for repurchase agreement transactions related to the central bank

The Central Bank of Nigeria (CBN) has rolled out special bills to foster economic recovery from the Covid-19 pandemic and bolster the financial market, media reports said. It is reported that the 90 -days special bills are likely to avail the monetary authority of the additional liquidity management tools.

It is reported that the special bill will be tradable amongst banks, institutional investors and retail. The bill will include features such as zero-coupon, 90 days tenor and CBN’s applicable yield at issuance.

Furthermore, the instrument is not applicable for repurchase agreement transactions related to the central bank and shall not be discountable at the central bank’s window.

The CBN unveiled a new policy that allows unfettered access to forex from money transfer services such as MoneyGram and Western Union including the diaspora.

Few financial analysts and the Association of Bureau De Change Operators of Nigeria (ABCON) have supported the new policies.

ABCON President, Alhaji Aminu Gwadabe, told the media, “With the new policy, the monopoly in the remittance market has been broken. 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. So, there will be liquidity and also the monopoly has been broken because before recipients of such funds didn’t have an option because they are forced to collect naira from the banks. This is a welcome development and we commend the CBN.”

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