Barclays To Cut Nigeria Off Its EM Local Bond Index Early Next Year

Nigeria will be removed Barclays’ Emerging Markets Local Currency Government Index as of February next year, because of what the bank says are challenging “investment conditions” for the foreigners in the most recent year-and-half.

The Africa’s largest economy that depend strongly on oil export for income has come into a few real headwind after oil prices have dropped on the international business sector by more than 40 percent since the last quarter of 2014.

The country’s local currency has fallen more than 22 percent this year, constraining the Central Bank of Nigeria to present stiffer foreign exchanging rules that have made it difficult for foreigners to leave the country’s resources. “Nigeria will be removed from the lead Emerging Markets Local Currency Government Index as of February 1, 2016,” Barclays said in an announcement.

“The Central Bank of Nigeria has introduced a number of measures that have complicated managing Nigerian bond government index exposure, specifically restricting access to the naira,” Barclay added.

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Barclays’ removal of Nigeria from the record is likely to deny the country some auxiliary debt support, Financial Times reported.

In September, the West African country was also cut off from the JP Morgan’s Government Bond Index-Emerging Markets, or GBI-EM, referring to a lack of liquidity in Nigerian markets because of restricting foreign trade exchanging rules the Central bank introduced not long ago in Nigeria.

Nigerian capital markets were caught off by surprise, according to the JPMorgan decision causing the Nigeria shares at the bourse to weaken and bond bounced in response.

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