Business Latest Trending Now

CBN, Banks move to avert JP Morgan’s axe

Nigerian banks suffer 50% loss from CBN treasury bills sale

The Central Bank of Nigeria (CBN) will today (Friday) meet with chief executives and treasurers of commercial banks in the country, in a bid to avoid the warning from JP Morgan that it shall remove Nigeria from its Government Bond Index (GBI-EM) by the end of the year.

Reuters reports bank sources as disclosing that the meeting would discuss issues surrounding the central bank’s foreign exchange policy.

The meeting is also expected to discuss measures to improve liquidity in the foreign exchange market.

The CBN Governor, Mr. Godwin Emefiele, had assured jittery investors that the central bank was “doing everything possible” to ensure that the country remained on the JP Morgan Index in order to avoid the adverse consequences which the country’s exclusion could cause.

The central bank imposed tight controls on the foreign exchange market in February in a bid to curb the weakening of the naira in Africa’s biggest economy.

The CBN recently adjusted its exchange rate peg to N196.90 to a dollar at the interbank market, the rate it closed with Thursday, from N196.95/$1. The naira has been stable at the interbank market.

The central bank had previously made a tiny adjustment to the exchange rate peg, with analysts saying the move indicated that the CBN was beginning to think about how to loosen its currency regime.

A dealer said the central bank was trying to gauge the level at which it could defend the naira, but noted that the bank was running low on ammunition to do this.

JP Morgan recently warned that it might eject Nigeria from its GBI-EM by the year end unless Africa’s biggest economy restores liquidity to currency markets in a way that allowed foreign investors tracking the benchmark to transact with minimal hurdles.

JPMorgan said it extended the deadline to eject Nigeria by another six months to take into account the arrival of President Muhammadu Buhari.

JP Morgan included Nigeria on the widely followed index in 2012, when liquidity was improving, making it only the second African country after South Africa to be included. It then added Nigeria’s 2014, 2019, 2022 and 2024 bonds.

Ripples…without borders, without fears

Ripples Nigeria

We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.
www.ripplesnigeria.com

Join the conversation

Opinions

About the author

Ripples Nigeria

We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.
www.ripplesnigeria.com

Do NOT follow this link or you will be banned from the site!