ABUJA, Dec 3 (Reuters) - Nigeria's central bank has
introduced special bills to manage excess liquidity on the money
market awash with naira after foreign investors dumped local
assets as a result of the pandemic-induced oil price crash.
The bank in a circular dated Dec. 1, said it will offer
90-day zero coupon bills with yields to be determined on issue.
It said the instrument will be traded among banks and investors
but cannot be discounted by the central bank.
Nigeria's money market has been awash with cash this year.
Liquidity on the banking system opened at 515.13 billion naira
on Thursday and has been in credit for more than two weeks.
The central bank has been seeking ways to soak up the naira
liquidity that is also weakening the currency, which hit a 3-1/2
year low of 500 to the dollar on the black market.
Trading on the debt market on Thursday was calm as investors
awaited more information on central bank's special bills. The
central bank offered 70 billion naira in open market bills on
Thursday. Results of the auction is yet to be announced.
Yield on treasuries has dropped to historic lows due to
excess money markets liquidity.