Central Bank of Nigeria (CBN) has set a maximum limit on cheque payments at N10 million with effect from January 1, 2010. The apex bank said that the measure was part of the efforts to enhance the efficiency of the payments system in the country.

Mr. Sam Oni, CBN Director of Banking Supervision said in view of this development, payment value exceeding N10 million should be made through the e-payment mode such as the Central Bank Inter-Bank Funds Transfer System (CIFTS i.e. RTGS) and Nigeria Inter-Bank Settlement System Electronic Funds Transfer (NEFT).

He said that the maximum limit serves as a risk reduction measures in the clearing and settlement arrangement in line with International best practices.

To support this initiative, Mr. Oni said deposit money banks should properly educate their customers on the implementation procedure in order to ensure smooth operation of the system and financial intermediation.

In another development, the apex bank, on Friday said, the 212th meeting of the monetary policy committee (MPC) of the CBN will hold for two days, January 4 and 5, 2010 to consider developments in the International and domestic economy and chart monetary policy for 2010.

The first meeting of the reconstituted MPC will also consider the monetary credit, foreign tade and exchange rate policy guidelines for 2010 – 2011. The committee in September meeting noted that the headline ( year-on-year) inflation has been stable at a little over 11 percent. (11.53 percent in 2008) and 15.94 percent (15.98 percent in 2008). Given the outlook on output and limited aggregate demand, MPC  said the headline inflation would moderate further by the end of the year but warned that should there be any reversal in the movement of inflation, appropriate policies would be adopted at the next MPC meeting.

Provisional data for broad money (M2) for July, 2009 showed a growth of 10.2 percent on a year-on-year basis, the lowest for any month since February 2006. This largely reflected the decline in net foreign assets (NFA) and sharp deceleration in growth of credit to private sector.

The committee noted that recent improvements in oil output and prices would help to improve the gross foreign exchange reserves of the economy. However, it underscored the importance of continuing with the efforts at improving the macroeconomic climate for attracting foreign capital inflows and spurring growth of private credit for productive purposes. Perceptions to market participants.

The spread between the unsecured call rate and the secured open buy-back (OBB) rate has since then come down significantly and average spread of 1384 basis points between July 1 and July 17 and the average spread of 1115 basis points in June 2009. The coupon rates on dated government securities in the primary market have tended to move downwards.

H.A. Salako, on behalf of CBN Director Trade & Exchange Department, last week will close for business with effect from Friday December 18, 2009 in consideration of the Christmas and New Year holidays adding that authorised dealers and Bureau de Change operators should know that the market will re-open for business on Monday, January 4, 2010.