Nigeria Has No Plan To Ban Foreigners From Bills Sales

The Central Bank of Nigeria has denied claims that it planned on freezing out foreigners from the sales of Open Market Operation Bills which was introduced to help stabilize the Naira in the wake of crude oil collapse in 2015.

The central bank’s director of monetary policy, Hassan Mahmud, had earlier in the week said  that offerings to non-residents of OMO bills would “ultimately” be phased out, without giving a time frame. However, Governor Godwin Emefiele said in an interview with on Thursday that the central bank is not thinking about excluding offshore investors from the short-term bond market.

The short term bills sales have been one of the most profitable in Africa for foreign portfolio investors who make as much as 30% return in dollar terms. The cost of liquidation has become burdensome to the central bank according to Hassan Mahmud.

The central bank banned domestic investors from participating in the sales in October 2019 as the cost of liquidating the securities spiked.  The bank had outstanding OMOs of $8.3 billion as of March 4, 2021 according to CBN records.