Money market remains flat as N330b treasury bill maturity rolls back
CBN orders resolution of BVN name differences in five days
The money market activities will this week remain flat, as the N329.9 billion expected treasury bills’ maturity would be recycled simultaneously, with no other foreseeable Naira inflow.
The “no increase, no shortfall” strategy may be part of the grand plan by the monetary authority to ensure that no excess Naira is available for foreign exchange (forex) speculations.
Again, since some of last week’s provisions for forex auctions by banks were not fulfilled, the balance may be appropriated as usual for any possible dollar auction this week.
A mix of monetary policy actions last week, left the interbank lending rates moving back and forth, as the market liquidity was neither high nor too low, until Friday when N257.9 billion treasury bill matured, which increased money in circulation and consequently kept the interbank lending rates- Open Buy Back (OBB) at one per cent and Overnight at 1.3 per cent.
The relatively tight liquidity, may have been described as a deliberate plan by the Central Bank of Nigeria (CBN) to control the demand for the foreign exchange at the market.
Meanwhile, CBN said it has noticed that some customers could not link their BVN to their accounts, due to discrepancies between the record on the BVN database and the records on the core banking applications of banks.
It however, set a five working days timeline for the resolution of BVN issues, which starts counting from the day a customer submits all the required documents.
Last week, the Naira-dollar exchange rate crashed in favour of the local unit, which the tight liquidity stance was attributed as part of measures used in achieving the result.
Already, there are projections that the quantity of money in circulation would remain the same this week, as provisions for forex auction and expected refund for unfulfilled demand last week, will leave the system liquidity flat again.
Specifically, it had started relatively low last week at N381.8 billion, as unfulfilled bids from the CBN forex intervention of the previous week were not refunded to banks.
Consequently, the interbank lending rates- OBB and Overnight rose 0.8 per cent each to close at 1.4 per cent and 1.8 per cent respectively.
However, following a call for banks’ provisioning for the weekly forex intervention by the apex bank, the expected decline in liquidity level was offset by the credit for unfulfilled bids of the previous week.
The development inched up the liquidity level to N404.3 billion, but with no other significant inflows in the middle of the week, money market rates and the Nigeria Interbank Offered Rates rose to 4.1 per cent for OBB, 4.7 per cent for Overnight and 8.1 per cent respectively.
Some banks’ customers have been experiencing difficulties in their efforts to link their accounts, with banks as well not being able to rectify the differences in the names used for BVN registration and the ones already in their records.
In the new arrangement, CBN has ordered banks to effect corrections of date of birth on BVN record only once, but with supporting documents, evidencing the correct date of birth. This includes change necessitated by marriage.
The documentations, which would vary according to the circumstances that necessitated the change, include birth certificate, marriage certificate/affidavit, international passport and on rare cases, a report would be sent to the Nigerian Financial Intelligence Unit (NFIU).
It also allows minor correction of names, due to misspelling and names that are partially or totally different.
At extreme case, customers that wish to close their accounts are also allowed and where the account is not linked with the BVN, a payment instrument should be issued in the name in which the account was opened.