The Central Bank of Nigeria, CBN, has urged the board of the Financial Markets Dealers Quote to revive the market for commercial papers in Nigeria.
Commercial papers are unsecured promissory notes with a fixed maturity of about nine months.
They are usually issued by companies to raise money to meet short term finance obligations. The notes are backed by the promise of the issuing organization to repay based on the agreed terms.
The CBN Governor, Mallam Lamido Sanusi, who made this call at the official launch of the MFDQ PLC, Sanusi said that, “The FMDQ should also look at the revival of the Commercial Paper market and its regulation.
With FMDQ, a fixed income securities exchange, the registration process is expected to be established to kick-start this segment of the money market which is useful in promoting the culture of companies in the issuance of instruments and securities”.
He also called for the review of the Nigeria Interbank Offered Rate (NIBOR). “The inter-bank interest rate benchmark (NIBOR) definitely remains an area for development. FMDQ is expected to look at this in light of IOSCO’s standards on benchmarks”, he said.