CBN checks abuse on access to standing lending facility by authorised dealers

By Chioma Obinagwam

In view of the observed abuse of access to the Central Bank of Nigeria (CBN) Standing Lending Facility by authorised dealers, the CBN has said that it has become imperative that some measures be taken to redress the trend and re-define the mode of operation by authorised dealers at the window.

According to a statement signed by the Director of the Financial Markets Department at CBN, Alvan Ikoku, all authorized dealers are, henceforth, directed to refrain from accessing the discount window of the CBN on the settlement dole for government securities’ auctions.

“The securities referred to here are CBN Bills, Nigerian Treasury Bills and Federal Government of Nigeria Bonds,” it disclosed.

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The statement also indicated that all authorised dealers are henceforth, required to note and comply accordingly, as any violation will result in the denial of access to the CBN Standing Lending Facility.

“You are reminded that authorised dealers who come to any of CBN’s windows are prohibited from the inter-bank foreign exchange market on the same day,” it continued.

This development is coming on the heels of the recent extension of the Bank Verification Number(BVN) enrolment of Nigerians in diaspora from August 1, 2016 to December 31, 2016, along with the recent increase of the Monetary Policy Rate (MPR) to 14 per cent.