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Home Sectors BUSINESS & ECONOMY FGN Bond Yields Crash On New Flexible Forex Policy

FGN Bond Yields Crash On New Flexible Forex Policy

Yields on Nigeria’s government bond fell across maturities on Wednesday, May 25 as traders bought debt to cover their positions.

This development came a day after the Central Bank of Nigeria, CBN, kept interest rates on hold but pledged a flexible currency policy to woo foreign investors.

The apex bank after its MPC meeting on Tuesday, said it would adopt a flexible exchange rate policy, a shift from a peg for the naira seen as overvalued which had hampered growth and investment.

Bond yields fell between 11 and 46 basis points across maturities with liquid five-year debt down the most to 13.24 per cent.

Yields on the 2020 bond has been falling since last week in the run-up to the central bank meeting. Before the MPC decision, traders had taken a short position on debt, expecting the monetary policy committee to hold rates at 12 per cent to boost Africa’s biggest economy so as to tackle slowing growth.

The 20-year benchmark paper, the most traded on Wednesday, fetched 13.24 per cent, down 11 basis points from Tuesday’s close.



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