CBN Eases Liquidity as TSA Compliance Rattles Interbank Market

The Central Bank of Nigeria has moved to ease liquidity in the banking system, in response to a severe liquidity squeeze in the interbank market. The CBN, ThisDay gathered, moved to make refunds to commercial banks for the equivalent of the amounts they had transferred to the TSA from the cash reserve ratio sterilised with it. But before the CBN contacted the banks, sources said they made no bids on the interbank money market as they awaited instructions on how to comply with a directive to transfer government revenues into a single account with the CBN. President Muhammadu Buhari had set a deadline of September 15, 2015, for full compliance with his directive that all revenue due to the federal government or any of its agencies must be paid into the TSA or designated accounts maintained and operated in the CBN, except otherwise expressly approved. Read more about the treasury single account here.