The Central Bank of Nigeria has introduced two new financial instruments, namely, ‘Funding for Liquidity Facility (FfLF)’ and Intra-day Facility (IDF)’ at its window, for access by Non-Interest Financial Institutions (NlFls) licensed by it.
The features of the financial instruments for FfLF include the CBN providing a liquidity facility on overnight basis only and to be terminated on the next business day.
The Authorized Non-Interest Financial Institution (NIFI) is to provide eligible securities to the CBN as collateral for the facility.
The value of collateral is to be a minimum of 110 per cent of the value of the facility and the transaction shall be at a zero per cent interest rate.
The opening hours for FfLF shall be between 2:00pm and 3:30pm, and terminate on commencement of next business day.
At maturity, the transaction unwinds and the CBN receives back its funding and returns the collateral to the NIFI.
For the Intra-day Facility (IDF), the CBN will provide for settlement on same business day while an authorized NIFI shall provide eligible securities as collateral for the facility.
The value of eligible securities shall be a minimum of 110 per cent of the value of the intra-day facility required by the NIFI. The operating hours for the IDF shall be between 9:00 a.m. and 2:30 p.m.
