Santa came early but with T&C

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It’s the season of circulars! Shortly after the circular released by the Apex Bank on Monday, November 30, 2020, allowing recipients of diaspora remittances into the country the option to withdraw the money in USD, the Central Bank released another circular dated December 1, 2020, announcing the introduction of a new “Special Bill” and no, it is not an OMO bill.

The introduction of the new bill which is a part of the Apex Bank’s efforts at deepening the financial markets and availing the monetary authority with an additional liquidity management tool.

The features of the CBN’s Special Bills are as follows:

  • The tenor of 90 days.
  • Zero-coupon, applicable yield at issuance will be determined by the CBN.
  • The instrument will be tradable amongst banks, retail and institutional investors.
  • The instrument shall not be accepted for repurchase agreement transactions with the CBN and shall not be discountable at the CBN window
  • The instrument will qualify as liquid assets in the computation of liquidity ratio for deposit money banks.


We expect to see yields retrace upwards as the introduction of this “Special bill” will provide more supply to the low tradeable investment universe. Banks are expected to be the major players in the Special Bill market as they will be looking to invest their liquid cash in the instrument which will enable them to avoid CRR debit as well as improve their liquidity ratio.

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“What levels will the security be issued at?”

There are still a lot of speculations on this. However, we think that mirroring the stop rate at the last Central Bank OMO auction and comparing it with the last PMA result, stop rate at the “Special bill” should more attractive than the PMA stop rate.

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Santa came early but with T&C - Brand SpurSanta came early but with T&C - Brand Spur

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