FG: Nigeria's Interest Paramount as JP Morgan Delists FGN Bonds

They were emphatic in their response clear any fears whatsoever, that may arise as a result of the delisting of the country from JP Morgan’s Bond Index.

The Federal Ministry of Finance, Central Bank of Nigeria (CBN) and Debt Management Office (DMO) said on Wednesday that interest of Nigeria and the Nigerians were paramount in any economic decision taken by them.

The JP Morgan announced on Tuesday the delisiting of Nigeria from the Government Bond Index as a result Nigeria’s authorities’manipulation of forex market to safeguard the naira.

They said they would continue to take economic decisions that will impact positively on the lives of all citizens.

These key government financial organs made their positions known in a joint statement signed by CBN's Director Corporate Communications, Mr. Ibrahim Mu'azu.

They also said “the market for FGN Bonds remains strong and active due primarily to the strength and diversity of the domestic investor base”.

According to Reuters JP Morgan will by October ending phase out Nigeria from its bond index, warning that currency controls introduced by the CBN in recent months were making bond market transactions too complex to meet its rules.

When the naira was weakened by the global plunge in oil prices, Nigeria first used its currency reserves to try to stabilise it, then resorted to market controls as pressure persisted.

JP Morgan's decision to phase Nigeria out of its index which many investors track, marked the conclusion of a process initiated in January, Reuters reported.

Some bonds will be removed by the end of September and the rest by the end of October, JP Morgan said.

Earlier, it had said that to stay on the index, Nigeria would have to restore liquidity to its currency market in a way that allows foreign investors tracking the index to conduct transactions with minimal hurdles.

“Foreign investors who track the GBI-EM series continue to face challenges and uncertainty while transacting in the naira due to the lack of a fully functional two-way FX market and limited transparency. As a result, Nigeria will be removed from each of the six GBI-EM indices starting Sept 30,” the bank said in a note.

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