CBN to mop up N1.8tr in 3 months

THE Central Bank of Nigeria, CBN, yesterday unveiled plans to mop up N1.866 trillion from the banking system through the sale of treasury bills. According to the treasury bill issue programme for the second quarter released yesterday, the apex bank said it would sell N933.2 billion of secondary market and N933.2 billion primary market bills from March 20th to June 5th. Secondary market bills are previously issued bills which are resold by the CBN. They are also referred to as open market operations (OMO) bills. They are most used to manage the amount of idle cash in the banking system. Primary market bills are freshly issued bills and they are used to borrow money on behalf of the federal government. The CBN said that it would sell N202.59 billion of OMO bills in the last week of March, N334.25 billion in April, N258.39 billion in May and N137.97 billion in the first week of June. Similarly, the apex bank would sell N202.59bn of Primary market bills in the last week of March, N334.25bn in April, N258.39bn in May and N137.97 bn in the first week of June. In the last quarter 2013, the apex bank issued N4.49 trillion worth of treasury bills comprising N2.431 trillion of OMO bills and N2.06 trillion of primary market bills. In another development, the CBN yesterday expressed concern over the quality of cheques printed by banks, saying that accredited cheque printers were not complying with the approved standard. The apex bank said this has resulted in high level of cheque rejection at its cheque processing center. This concern was expressed via a circular titled ‘Submission of sample cheques, pre and post production’. The circular was signed by Mr. Dipo Fatokun, Director, Banking and Payments System Department. The circular stated, “Though the cheque truncation system was deployed nationwide on 1st June 2013′ reports reaching us indicated a high level of rejects at the MICR processing centers.