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Nigeria’s Central Bank Governor Says JPMorgan Has Issues

Nigeria’s Central Bank Governor Says JPMorgan Has Issues

By Maggie Fick | From Financial Times

Nigeria’s central bank governor has dismissed concerns about foreign exchange liquidity, despite JPMorgan’s removal of Africa’s biggest oil producer from its influential emerging markets bonds index amid concerns about the country’s economic management.

The US bank’s decision was a further blow to Africa’s biggest economy, already battered by falling oil prices and emerging market turmoil just three months after President Muhammadu Buhari rode into office on a wave of optimism.

But Godwin Emefiele questioned the reasons behind JPMorgan’s decision. “JPMorgan raised two issues, liquidity and transparency,” he told the Financial Times on Thursday.

“But there [remains] a range in the volume of liquidity from between $350m to almost $400m daily, and that has never been a problem. And we’ve also addressed the issue of transparency. So I don’t really know what the issues are.”

The central bank governor, whose protectionist policies and management of the foreign exchange rate has alarmed analysts, said that dollar demand was still being met, although traders say liquidity has dried up.

The country’s ejection from the GBI-EM index late on Tuesday has already triggered outflows from the $2bn of local bonds the index tracks. Nigeria’s bond market regulator imposed a new spread limit on Thursday, reports said. By mid-morning on Thursday, the domestic stock market had slid nearly 3 percent to hit the biggest two-day decline in eight months.

Read more at Financial Times