Emefiele's Suspension: Investors Rush as Nigeria's Dollar Bonds Jump 5-Month High
- Foreign investors are reacting positively to Emefiele's suspension by snapping Nigeria's bonds
- The bonds traded to their 5-month high, leading to an increase of 3 cents
- Analysts say Emefiele's suspension is responsible for the rejuvenated interest in Nigeria's debts by foreign investors
Investors are snapping up Nigeria's bonds priced in the US dollar. The bonds traded to their highest this year on Monday, June 12, 2023, as the market reacted positively to the suspension of the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele.
The apex bank's helmsman's ouster was deemed a departure from various policies that have kept foreign investors away from Nigeria.
Source: Getty Images
CBN loaned over N22 trillion to the Federal government under Emefiele
President Bola Tinubu suspended Emefiele on Friday, June 9, 2023. He was arrested by the Department of State Security (DSS), the same for what the DSS said were investigative reasons.
PAY ATTENTION: Join Legit.ng Telegram channel! Never miss important updates!
According to Premium Times, during his nine-year stay at the bank, Emefiele superintended over a CBN that advanced about N22.7 trillion overdraft, known as Ways and Means to the Federal Government.
Analysts believe that Emefiele's action increased Nigeria's public debt to N77 trillion.
National Assembly agree to increase borrowing limit from CBN
In early May 2023, the Senate agreed to a request by ex-President Muhammadu Buhari's government to convert the CBN's Ways and Means, which are repayable within one year, to an overdraft to be repaid over 40 years.
On May 28, 2023, Nigeria's House of Representatives hurriedly convened a special plenary to approve an increase in the borrowing limit from the CBN.
Nigeria's Eurobonds recorded the highest rise among emerging markets, with the bonds having the most extended maturity, climbing to their year-to-date high.
Read also
Naira redesign: Suspended CBN governor Emefiele faces yet another battle with Tinubu's govt
Nigeria to operate one exchange rate
Debts due in 2025 rose by over three cents on the dollar to 73.74 as the country's fixed-income markets couldn't react to development on Monday, June 12, 2023, due to a public holiday.
Wale Edun, an assistant to President Bola Tinubu, stated that the unification of Nigeria's chaotic multiple exchange rate regime is imminent, adding that it could be done within the quarter.
There is a 60% gap between the official exchange rate of the naira to the dollar and the unofficial parallel market.
Emefiele’s suspension: Nigerian stock market hits 15-year high, investors pocket over N1.2trn on first trading
Legit.ng earlier reported that the Nigerian stock market experienced significant growth on Tuesday, June 13, 2023, with market capitalisation soaring by 4% (N1.22 trillion) to reach N31.6 trillion.
The strong rebound was attributed to investors' positive response to the suspension of Godwin Emefiele, the Governor of the Central Bank of Nigeria (CBN), by President Bola Tinubu, Punch reports.
The benchmark all-share index also saw a 4% increase, rising by 2,232.58 points to close at 58,163.55 points.
Source: Legit.ng
