CBN Headquarters
Investment in Bankers’ Acceptance (BAs) increased by 5.3 per cent to N63.4 billion in the month of April, as banks continue to search for alternative investment window.
The figure represented a growth by N3.4 billion, compared with the N60.04 billion recorded in the month of March.
BAs are short-term credit investment created by a non-financial firm and guaranteed by a bank. They are often traded at a discount from face value on the secondary market. Banker's acceptances are very similar to T-bills and are often used in money market funds
According to the Central Bank of Nigeria (CBN) monthly economic report made available to THISDAY yesterday, the value of investment in Bas had declined by 10.7 percent in the preceding month.
The report stated that the increase recorded, reflected the increase in investments by deposit money banks and discount houses.
It showed that the value of money market assets outstanding as at the end of April 2011 was N4.861 trillion, representing an increase of 5.6 per cent, compared with an increase of 2.5 per cent at end- March 2011.
“The development was attributed to the 6.8, 5.3 and 4.2 per cent rise in the value of FGN Bonds, Bankers Acceptances and Nigerian Treasury Bills, respectively. Activities on the Nigerian Stock Exchange (NSE) in April 2011 were bullish, as all the major indicators trended upward.
Gross federally-collected revenue in April 2011 was estimated at N781.84 billion, representing an increase of 30.6 and 37.5 per cent over the proportionate monthly budget estimate and the receipts in the corresponding period of 2010, respectively. At N621.53 billion, gross oil receipts, which constituted 79.5 per cent of the total revenue, exceeded the proportionate monthly budget revenue estimate and the receipts in the corresponding period of 2010 by 49.7 and 56.6 per cent, respectively,” it added.
According to the report, banking system’s credit to the private sector fell by 0.5 per cent to N9.376 trillion in the month under review, from the preceding month’s level, in contrast to a rise of 2.7 per cent at end-March 2011. Similarly banking system’s claims on the core private sector declined by 0.4 per cent to N9.012 trillion, in contrast to the increase of 2.6 per cent in the preceding month.
It said: “The development reflected wholly the fall in the deposit money banks’ claims on the sector. Relative to the level at end-December 2010, banking system’s credit to the private sector fell by 4.6 per cent.”
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