Developing the interbank and bond markets in Mauritania (Consultant)

At the conclusion of the assignment: • A prioritized and actionable reform roadmap will be adopted. • Capacity of financial sector stakeholders will be significantly strengthened. • Interbank market activity and liquidity management practices will be enhanced. • Secondary market activity in government securities will increase. • The investor base for government securities will broaden. • Mauritania will be better positioned to develop deeper and more resilient domestic financial markets.

Remotely

10 months

Background and rationale for support The Central Bank of Mauritania (Banque Centrale de Mauritanie, BCM) has implemented a range of monetary policy instruments, market infrastructure reforms, and regulatory mechanisms to deepen both the interbank market and the government securities (bonds and treasury bills) market. In the interbank market, the BCM has strengthened liquidity management through open market operations, standing lending and deposit facilities, and regular monitoring and publication of interbank rates and transaction volumes. These instruments enable banks to borrow and lend liquidity among themselves, improve short‑term funding allocation, and enhance the transmission of monetary policy. The BCM has also modernized payment and settlement systems, which facilitate smoother interbank transactions and improve confidence in market operations. A major recent reform was the launch of the interbank foreign exchange market in December 2023, replacing the previous exchange-rate fixing system. To support this market, the BCM introduced an electronic trading platform for interbank transactions, established a network of market makers (teneurs de marché), and conducts foreign-exchange auctions to provide liquidity when necessary. The central bank also clarified its intervention framework and accelerated complementary reforms aimed at facilitating liquidity exchanges between banks and improving the overall functioning of the money market, including the development of instruments compatible with Islamic finance principles. These reforms have contributed to a better alignment of market interest rates with the central bank’s policy rate. Regarding the bond and government securities market, the BCM has supported the development of a structured market for Treasury bills and Treasury bonds by organizing auctions, publishing market data, and providing settlement infrastructure for government securities transactions. The central bank disseminates information on yields and weighted average rates across different maturities, thereby enhancing market transparency and price discovery. Through its role in the payment, clearing, and securities settlement systems, the BCM has also strengthened the institutional framework necessary for the issuance and trading of public debt instruments. These measures help establish a domestic yield curve, provide investment opportunities for banks and institutional investors, and create the foundations for a broader capital market. Despite this progress, significant challenges remain, including limited interbank market activity, low secondary market liquidity for government securities, a narrow investor base, limited market-making capacity, insufficient risk-management capabilities among market participants, underdeveloped money market instruments, and capacity constraints across the banking and financial sectors. These challenges constrain financial sector deepening, market-based monetary policy implementation, and the mobilization of domestic savings for productive investment. To address these constraints, a consultant will be recruited to undertake a comprehensive diagnostic assessment, develop an actionable reform roadmap, provide technical advisory services, and deliver extensive capacity-building programs to financial sector stakeholders. Duties and Responsibilities: Under the direct supervision of the Chief of the Subregional Initiatives Section and the overall supervision of the Director of ECA SRO-NA, the consultant shall undertake the following tasks. 1: Diagnostic Assessment • Review of Interbank Markets including the structure and functioning of the interbank money market. • Assess liquidity management practices in commercial banks. • Evaluate the use and effectiveness of central bank liquidity facilities. • Assess barriers to interbank lending. • Explain why, despite the reforms and market infrastructure already put in place, interbank market activity remains below expectations. Why banks are still not transacting more actively with each other, whether due to the way liquidity is distributed, lack of trust, market incentives, operational constraints, or the way banks currently rely on BCM facilities. Why banks are still not transacting more actively with each other, whether due to the way liquidity is distributed, lack of trust, market incentives, operational constraints, or the way banks currently rely on BCM facilities. When data are available, to look at how the interbank market has actually been used in practice in recent years, including the extent to which banks rely on the Central Bank for their liquidity needs, to identify the main bottlenecks. • Suggest ways and means to translate reforms into deeper market activity • Review of Government Securities and Bond Markets • Assess the primary issuance framework for Treasury bills and bonds. • Analyze auction design and issuance calendars. • Evaluate investor participation patterns. • Assess secondary market activity and liquidity. • Examine the role of primary dealers and market makers. • Identify bottlenecks to bond market development. • Review of Financial Market Infrastructure including payment systems, securities settlement arrangements, trading platforms. • Review relevant laws and regulations and benchmark Mauritania against international good practices. • Identify regulatory gaps. 2. Development of Reform Strategy Based on the diagnostic findings, the consultant shall develop a market development strategy. The strategy shall include: Interbank Market Recommendations • Measures to increase market liquidity. • Introduction or strengthening of repo markets. • Expansion of liquidity management instruments. • Islamic liquidity management instruments where appropriate. Bond Market Recommendations • Measures to increase secondary market liquidity. • Investor base diversification. • Institutional investor participation. • Retail investor development. • Corporate bond market development prospects. Infrastructure and Regulatory Recommendations • Payment and settlement enhancements. • Market transparency measures. • Trading platform improvements. 3. Capacity Building and Training The consultant shall design and deliver a capacity-building program covering: • Interbank Market Development. • Bond Market Development. • Financial Market Infrastructure including trading platforms, settlement systems, market transparency, data reporting and analytics. 4. Advisory Services The consultant shall provide ongoing advisory support throughout the assignment.

An advanced university degree (Masters' or PhD) in economics, finance or related fields is required A minimum of ten years of experience in economics and finance is required. Experience in analytical policy research particularly in monetary policy in North Africa is an advantage Experience advising central banks is an advantage

English and French are the working languages of the UN Secretariat. For this consultancy, Fluency in French is required. Fluency in the other language is an advantage. Fluency in Arabic is an advantage

Not available.