The Central Bank of Nigeria, CBN, will soon mop up a total of N200.32 billion from the banking sector in order to control the rate of inflation in the country.
Isaac Okorafor, acting director, Corporate Communications Department, CBN, said in a statement on Thursday that the amount would be mopped up through a special Open Market Operation at the rate of 16 per cent per annum.
Open market operation is the process of buying and selling of government securities in the open market by the CBN in order to increase or reduce the amount of money in the banking system.
Okorafor said the decision was reached at the end of a meeting of the Bankers’ Committee in Lagos on Thursday.
The decision is believed to a reaction to the maturity of N206 billion on Thursday. “In a move to further rein in inflation, the Central Bank of Nigeria has unveiled plans to mop up a total of N200.32bn from the Nigerian banking system through a special Open Market Operation at the rate of 16 per cent per annum. Rising from a meeting of the Bankers’ Committee in Lagos on Thursday, the CBN said its decision to mop up liquidity was in reaction to the maturity of N206bn on Thursday, June 15, 2017,” said Okorafor.
According to him,
the CBN decided on the rate of 16 per cent per annum due to the falling rate of inflation, which he noted would continue to decline.
The apex bank had earlier released its Treasury Bills Issue Programme for the third quarter of the year, with maturity dates for the various tenors as June 15, June 22, July 6, July 20, August 3, August 17 and August 31, 2017, respectively.