CBN governor goes in search of bond investors abroad


16 Jul 2016

CBN governor goes in search of bond investors abroad

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Central Bank of Nigeria (CBN) governor, Godwin Emefiele and one of his deputies, Sarah Alade traveled to the U.S. and U.K. this week

Their aim was to try and entice bond investors to buy assets in Africa’s largest economy

Emefiele and Alade met investors in Los Angeles, Boston, New York and London

If a report by Bloomberg is to be believed, CBN governor Godwin Emiefiele and his deputy on economic policy, Dr Sarah Alade have been touring the U.S and U.K this week to seek for bond investors.

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Emiefiele (l) and Alade (m) at a function last year
Emiefiele (l) and Alade (m) at a function last year

Unfortunately, both officials were said to have been disappointed as several investors in London told them there wasn’t enough liquidity in Nigeria’s foreign-exchange market for them to be comfortable buying naira bonds.

Emiefiele was said to have denied their claims that the CBN continued to control the currency’s exchange rate even after its 30 per cent devaluation against the dollar on June 20, they said.

Nigeria’s relies on oil for 90 percent of export earnings has affected the economy following the crash in crude oil prices in mid-2014.

READ ALSO: ECONOMY: Buhari Mad With CBN, Said That He Was Not Informed When Naira Was Devalued

The CBN imposed capital controls and a currency peg of 197-199 naira per dollar from March 2015 which chased away foreign investors.

The naira since has fallen to around 282 since the 16-month peg ended, prompting few investors to return local markets, even as the black market rate is still around 20 percent weaker at 360.

The Investors were said to have also expressed their concerns to Emiefiele that the CBN had lower reserves than its stated figure of $26.4 billion because it may have sold some of the currency on the forwards market.

Earlier today, July 15, the naira took a new tumble at both parallel and official markets. The naira, which began trading at around 283/$1 at the inter-bank market on Thursday, July 14, depreciated to 284/$1 today, July 15. At the Nigerian parallel market, the naira fell to its lowest level since the start of the new foreign exchange regime, trading at 363/$1, 392 to Euro and 465 to the Pound Sterling, a Lagos based Bureau De Change operator told US.

READ ALSO: Finally, CBN floats the Naira

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News Source: AskBBCNews, 9jaTales

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