Saved by its newly introduced Investors’ and Exporters’ window, Nigeria may have done just enough to keep it on the MSCI frontier index, according to Charles Robertson, chief economist at investment firm, Renaissance Capital.
Nigeria was under review for possible demotion from the MSCI’s frontier markets index to “standalone” status, until the latter opted to delay its final decision till November, “to allow more time for international institutional investors to better assess the effectiveness of the new FX trading window introduced by the Central Bank of Nigeria,” MSCI said Wednesday.
“Nigeria has indeed done enough to stay in the MSCI Frontier index, saved by the I&E window – but it is on the watchlist until November,” Robertson said via his twitter handle.
A raft of capital controls between 2015 and 2016 led to Nigeria’s delisting from two major indexes for emerging and frontier markets last year. One of which was the MSCI index and the other being the JP Morgan index.
However, Nigeria has since received new life since the new window was launched in April.
The country’s stock index is currently at a two-year high, and offers world beating returns of near 28 percent.
The new window is the country’s latest attempt to beat a biting dollar crunch that has undermined foreign investment inflow.
Since its introduction, cumulative transactions on the new I&E window has risen to $2.2 billion, from about $1 billion last month, according to the Central Bank.
The naira opened at N369 per dollar on Wednesday at the new window, according to data by FX trading platform, FMDQ Securities Exchange.
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