(Ecofin Agency) - The governor of the Central Bank of Nigeria, Godwin Emefiele (pictured) called on local fund managers in the UK to invest in naira-denominated bonds. The initiative could help strengthen the situation of the country's foreign exchange reserves, which are suffering from a further increase of the US dollar against the local currency.
Officially, the Central Bank gives 306 naira for one dollar. But on the currency market, the Nigerian currency is trading at 363 for each US dollar and has lost 26% of its value since the beginning of the year. This is much more than the exchange loss over the same period in 2018.
However, no official document or statement from the Bank confirms the scenario. But on the stock market, for instance, the volume of disinvestments by foreign investors reached 1 trillion naira, compared to 780 billion naira of investments. This makes a gap of 220 billion naira.
Statistics of foreign investment on public debt issued in local currency are not available, but recent initiatives by the central bank to attract them tend to show that there is also a certain level of disinterest on this segment. Restoring Nigeria's foreign exchange reserves is now a top government priority. And President Buhari told the Central Bank to stop providing funding for food imports.