Nigeria’s Eurobonds have surged after the suspension of Central Bank governor Godwin Emefiele over the weekend.

According to reports, Emefiele oversaw the implementation of multiple exchange rates which failed to strengthen the naira. Many overseas investors welcomed his suspension, resulting in the rise of the West African oil producer’s eurobonds. The price of these eurobonds increased by as much as 2.6 cents in the dollar on Monday, improving ; many issues to their highest prices since late January. Tradeweb data showed that the biggest gains were seen in longer-dated maturities,with the 2049 maturity by 2.353 cents to 80.231 at 07:46 GMT.

Nigeria’s challenge with dollar shortages has resulted in many people seeking out foreign currency on the black market. As a result of Emefiele’s suspension, Barclays economist Michael Kafe noted that;“We believe the changes signal a new era of focused, predictable monetary policy and a shift towards non-interventionism in the foreign-exchange regime.” This should assist in addressing the dollar shortage challenges, given this is likely to lead to a shift away from controlling the naira’s exchange rates to a more market-driven system.

President Bola Tinubu had strongly criticised Emefiele’s handling of the naira and monetary policy at his inauguration two weeks earlier. Tinubu has made it clear that he wishes to reset Nigeria’s economy.

“The haste with which the newly appointed president has begun to tackle the country’s economic challenges (e.g. the immediate removal of the fuel subsidy…) suggests he is keen to pursue all the difficult reforms at the early stages of his term”, said Kafe.

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