The naira on Wednesday weakened against the dollar at the Bureau de Change (BDC) and parallel market, but gained slightly at the interbank market after JP Morgan took a decision to delist the Federal Government bond from its government index.
Consequently, naira lost N1/$ or 0.45 each at the BDC segment of the foreign exchange market and parallel market.
After trading on Wednesday, the local currency closed at N222/$ compared with N221/$ the previous day at the BDC segment and N223/$ from N222/$ the previous day at the parallel market.
At the interbank foreign exchange market, naira gained N0.29k/$ or 0.15 percent as it closed at N197.38k/$ as against N197.67k/$ traded the previous day, according to data obtained from FMDQ.
JP Morgan late on Tuesday said it would remove Nigeria from its Government Bond Index (GBI-EM) by the end of October, after warning the government of Africa’s biggest economy that currency controls were making transactions too complicated.
But the Federal Ministry of Finance, Central Bank of Nigeria (CBN), and the Debt Management Office (DMO) have jointly responded to the JP Morgan’s decision saying they strongly disagree with the premise and conclusions upon which the decision rests.
In a statement signed by Ibrahim Mu’azu, director, corporate communications, CBN, they said: “While we would continue to ensure that there is liquidity and transparency in the market, we would like to note that the market for FGN Bonds remains strong and active due primarily to the strength and diversity of the domestic investor base. “For the avoidance of doubt, the Federal Government sees Nigeria and the interest of Nigerians as paramount. It will therefore only continue to take economic decisions that will impact positively in the lives of all Nigerians.”
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