Nigerian bonds to take cue from meeting on forex controls

 Nigeria's debt market will take its cue from a meeting to discuss controls in the foreign exchange market. According to dealers, the debt market is expected to take its cue from the outcome of a meeting on Friday called by the central bank to discuss foreign exchange controls with banking executives.
Traders said the meeting may come up with ways of relaxing the controls to boost liquidity in the foreign exchange market, driving up demand for Nigerian debt.
The central bank imposed the controls in February to curb speculation in the naira and save its dwindling foreign reserves. But they have slowed the participation of offshore investors in the bond market.
"We hope the forex market will be opened up at the end of the meeting today (Friday) to further encourage more offshore participation in the bond market," one dealer said.
JP Morgan has threatened to eject Nigeria from its Government Bond Index (GBI-EM) by the end of the year unless it restores liquidity to currency markets in a way that allows foreign investors tracking the benchmark to conduct transactions with minimal hurdles.
They removal of the controls could spur fresh interest in the debt market and a fall in yields across the curve.
The yield on the benchmark debt maturing in 2024 fell to 13.82 percent on Friday, from 13.95 percent a week ago.