By MALUM NALU
Bank of Papua New Guinea opens its bill tap facility, part of its liquidity management tools, to the public as of tomorrow (Thursday), as well as Friday and Mondays, The National reports.
Small investors can purchase Central Bank Bills (CBB)from a minimum K10,000 to a maximum K100,000 for fixed maturities in 28, 63, 91, 182 and 364 days.
The yield offered for each maturity at the tap will be the CBB weighted average rates determined at the weekly auction plus or minus a margin, which will not exceed 1%.
Trading under the CBB tap facility will be conducted at the Bank of PNG, ToRobert Haus ground floor.
The bill tap facility will be used to influence the price of money so as to achieve its objective of price stability.
“The objective of offering the tap facility is to encourage a wider participation by the general public, in particular small investors, in the securities market, hence contributing to the development of the retail market for government securities,” bank Governor Loi Bakani announced yesterday.
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| Bakani making the announcement yesterday.-Nationalpic by MALUM NALU |
“The tap facility is not intended to undermine the role of the commercial banks and other registered bidders who participate in the wholesale market for government securities.
“The tap facility is open to the general public, which includes individuals, private companies, church groups and others that are not registered bidders with the Bank of PNG.
“Licensed financial institutions such as commercial banks, finance companies, savings and loans societies, insurance companies, superannuation funds, micro banks and other registered bidders are not eligible to participate at the CBB tap facility.
“Government agencies or institutions and Bank of PNG staff are not permitted to participate in the CBB tap facility.”
Before investing in CBB tap, an investor must have a commercial bank account, and open a CBB account with an investor identification form with the BPNG.
“The total volume of CBBs to be traded on the market under the tap facility will be determined on a weekly basis by the monetary policy committee (MPC) and approved by the Governor,” Bakani said.
“Announcements will be done by the bank on the total amount on offer and term details.
“The application account must not be higher than the amount on offer for that week and only one application per term is allowed.”