It will be recalled that JP Morgan had hinged the decision to exclude the country on the steps taken by the Central Bank of Nigeria, CBN, to restrict foreign exchange transactions, insisting that it had prompted investors’ concerns about a shortage of liquidity.

JP Morgan had warned Nigeria that to stay in the index, it would have to restore liquidity to its currency market in a way that allowed foreign investors tracking the index to conduct transactions with minimal hurdles.

According to him, the announcement is expected to propel a massive sell-off of Nigerian instruments by foreign investors who track the bond index from their portfolios, as the resultant effect is that the country may witness significant capital outflows.

JP Morgan, a United States-based lender, said on Tuesday that its latest decision is based on alleged lack of liquidity and transparency in the Nigeria’s foreign exchange market.

LAGOS, Sept 9 The 1-year non-deliverable forwards (NDF) on Nigeria’s naira rose 2.79 percent to 268.50 on Wednesday, a day after a surprise move by JP Morgan to eject the African nation from its government bond index, Thomson Reuters data showed.

It will therefore only continue to take economic decisions that will impact positively in the lives of all Nigerians.

The Ministry of Finance, Debt Management Office and CBN released a statement in response to the planned removal of Nigeria from the JP Morgan Chase Emerging Market Bond Index.

JP Morgan said Nigeria will not be eligible for re-entry for at least 12 months from the date of exclusion, JPMorgan said.

In the light of this, we introduced an order-based, two-way FX market, which has resulted in the stability of the exchange rate in the interbank market over the past 7 months and largely eliminated speculators from the market.

When the naira, was weakened by the global plunge in oil prices, Nigeria first used its currency reserves to try to stabilise it, then resorted to market controls as pressure persisted.

The stock market, which has the second-biggest weighting after Kuwait on the MSCI frontier market index, was down 1.87 percent in early trade but recovered to a slight gain of 0.06 percent by the close.

Buhari has said he found the treasury “virtually empty”, forcing him to deal with inherited problems, along with the impact of falling oil prices on Africa’s top crude producer, which relies on sales for 70 percent of government revenues.

Asaolu, however, said it was not likely that things would get to the point where foreign investors would be struggling to get their money out of Nigeria.

Samir Gadio, head of Africa strategy at Standard Chartered Plc., said by phone from London. They had been around $8 billion last September.

All Nigerian stocks listed in the MSCI frontier market index fell by more than 3 percent, while bond yields spiked across maturities.

Analysts at Renaissance Capital said, “On the flipside, we expect to see mark-to-market losses coming through for banks, particularly those with proportionately higher investments in bonds given the upward bias in yields”.

This came after the CBN removed the restriction for foreign investors to hold government bonds for a minimum of one year before they could exit, among other policies that favour foreign investors.