Foreign Investors' Dollars Trapped in Nigeria’s Debt Market
editorApril 25, 2020 2:33 Am
Foreign investors have had their money trapped in Nigeria’s debt market as dollar liquidity dries up due to a lack of fresh inflows, a report monitored on Bloomberg has said.
Some bondholders who sold local-currency securities in March have been unable to repatriate their proceeds weeks after. Dollar inflows in Africa’s largest oil-producing nation have taken a hit from a plunge in crude, which account for 90 per cent of foreign-exchange earnings.
The investors and exporters market where foreigners buy dollars is trading $20 million a day on average compared with when it used to trade $300 million to $400 million per day two months ago, Stanbic IBTC equity analyst Akinbamidele Akintola said by phone.
“Everyone is a buyer of dollars but there is hardly any seller” after the central bank stopped dollar supply since March 20, Akintola said in a separate note earlier this month.Trapped investors are reinvesting funds in high-yielding central bank bills while they await enough liquidity to get their funds out, said Samir Gadio, London-based head of Africa strategy at Standard Chartered Plc. Yields on the long-dated papers now average 10% to 12% having rallied about 20% in March.
Some central bank debt auctions
Source:https://www.thisdaylive.com/index.p...-dollars-trapped-in-nigerias-debt-market/amp/
