CBN introduces new instruments to further deepen money market

The Central Bank of Nigeria (CBN), on Thursday introduced two financial instruments for intra-day and overnight liquidity for Non-Interest Financial Institutions (NIFI).
The instruments targeted at liquidity management and deepening of the financial system are known as: “Funding for Liquidity Facility (FfLF)” and “Intra-Day Facility (IDF).”
A circular on CBN website and signed by its Director, Financial Markets, Dr Alvan Ikoku states that under FfLF, the apex bank shall provide liquidity facility on overnight basis only, and to be terminated on next business day.
Also, under the IDF, CBN will provide facility for settlement, the same business day.
According to the apex financial institution, under the two windows, authorised NIFI’s shall provide securities as collateral and the value of such securities shall be a minimum of 110 per cent of the facility.
The circular read in part, “CBN shall specify acceptable collateral from time to time. These include, but not limited to the following security (ies): CBN Safe Custody Account (CSCA) Deposit; CBN Non-Interest Note, CBN Asset backed security (CBN-ABS); sukuk that has received liquidity from CBN,” among others.