ABUJA (Reuters) – Nigerian bonds rallied and the naira currency firmed on Friday after central bank governor Godwin Emefiele was nominated for a second term at the helm of the bank, traders said.
President Muhammadu Buhari has nominated Emefiele for another term, according to a letter read on the floor of the senate on Thursday. The upper house of parliament is expected to confirm the nomination.
“Emefiele’s re-appointment has provided support for a rally that started on the bond market this week. Offshore buyers have welcomed the re-appointment,” one trader at the Nigerian unit of an international bank said.
Bond yields, which move inversely to prices, fell across maturities and extended losses on Friday following Emefiele’s nomination.
Local asset managers and insurance companies accounted for much of the bond buying, traders said, with foreigners in the mix.
Analysts have said that Emefiele’s return could be supportive for bonds as investors hunt for yields on the debt market while equity players worry about slow growth, expecting sentiment to remain weak for stocks.
The benchmark 2028 bond yield fell to 14.20% on Friday, down from 14.36% the previous day while the naira, which has been trading tightly firmed to 360 per dollar after the nomination, traders said.