… naira trades at N1,600 in black market
Bank of New York Mellon Corp., in collaboration with Standard Bank Group Ltd., are creating a bridge for international investors to buy Nigerian government bonds denominated in naira through instruments Global Depositary Notes (GDNs) that are easier to access and trade globally.
According to a Bloomberg report, the initiative is designed to give international investors streamlined access to the elevated yields available in Nigeria, Africa’s most populous nation.
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The depositary notes will be eligible for settlement through major international clearing systems, Euroclear and Clearstream, enabling broader participation from global institutional investors. This development represents a significant milestone in efforts to deepen foreign access to Nigeria’s local debt market.
According to Bloomberg, Nigeria sold 182-day Treasury bills on June 4 at a yield of 18.5 percent, while its 2033 benchmark bond was trading at a yield of 19.33 percent as of Wednesday — among the highest returns in emerging markets.
As stated by the global head of depository receipts at BNY Mellon,Chris Kearns, the program is expected to help unlock investment potential across Africa and contribute to the development of capital markets on the continent.
The naira on Wednesday traded steadied at the rate of N1,600 in the parallel market, also known as the black market, street traders said.
At the Nigerian Foreign Exchange Market (NFEM), the naira closed flat on Tuesday as the dollar was quoted at N1,549.20, marking a loss of 0.25 percent compared to N1,545.26 closed on Monday.
Since the introduction of the Electronic Foreign Exchange Matching System (EFEMS) on December 2, 2024, the naira has witnessed relative improvement in value.
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According to Olayemi Cardoso, governor of the CBN, the renewed level of stability in the naira is the result of deliberate and disciplined reform efforts undertaken by the apex bank. He pointed out that the gap between the official and parallel exchange rates has largely been eliminated, highlighting it as one of the most significant changes in Nigeria’s foreign exchange landscape in recent memory.
