No Plan To Ban Foreign Investors From OMO Market-CBN

The Central Bank of Nigeria has denied plans to ban  Foreign Portfolio Investors from the Nigerian Open Market Operation bills.

The apex bank said this to clarify reports that it was planning to ban FPIs from OMO bills.

Bloomberg had on Tuesday quoted the CBN Director of Monetary Policy, Hassan Mahmud, as saying during an online conference in Abuja that OMO offering to foreigners would end, “once current obligations have been redeemed.”

But in an interview on Arise Exchange, Mahmud denied that the CBN was planning to ban FPIs soon, claiming that he was quoted out of context.

He said, “The analysis I gave or the explanation I gave was with regards to the build up or the assurance given by the Central Bank and that any investor that wants to take out his fund if those funds are invested and matured, the assurance that will be done was what I re-emphasised there

“The fact that all investors, the governor has said it in several fora  and that still subsist that investors can take out their funds in terms of capital outflow when they deem to do so.”

Nigeria’s OMO market in 2020 grew to about $40bn, according to Cairo-based investment bank EFG Hermes.

The debt instrument was used by the apex bank to help support the naira after oil prices plunged in 2015.

The bills have yielded the most rewarding returns of up to 30 per cent in dollar terms.

Foreigners hold a third of the bills issued by the CBN. Last year the Central Bank had foreign exchange backlog of over $2bn.

This was following foreign exchange pressure arising from Covid-19 induced low crude price.

Mahmud said, “I also mentioned that even the earlier backlogs that were being mentioned in terms of the demand pressure of the FX are been cleared and that subsequent build ups will be cleared over the period.

“There was no referral to the fact that the bank will ban foreign investors.”