The Central Bank of Nigeria has said that the country’s sovereign debt has not been delisted from the JP Morgan Bond Index.
The apex bank said the bond was only downgraded from overweight status and it should not be blamed for the removal by the US based investment bank.
JP Morgan’s Emerging Markets Bond Overweight and Underweight are used to make recommendations on stocks to buy or avoid.
When a stock has an overweight recommendation, it is projected to outperform its sector in the near future.
The US based bank said Nigeria had failed to utilise the global rise in crude oil prices to boost foreign reserves.
But the CBN Governor, Godwin Emefiele, said on Tuesday during the Monetary Policy Committee meeting that the downgrade does not mean Nigeria’s bond has been delisted.
He explained, “Reports have it that we are delisted, or that we have been removed from the JP Morgan’s Bond Index and the truth is that that is very untrue. Nigeria is still in that index.
“We were only declassified from overweight to market weight which is a mere reclassification of our size in the index. A rating agency changes your rating from positive to stable, this is basically what has happened.”
Nigeria’s foreign exchange reserves have struggled despite the rise in oil prices which has hovered around $38bn and $39bn.
Nigeria’s reserves was $40.42bn as of December 31, 2021, but has fallen to $38.75bn.
In the first quarter of 2022, Nigeria’s foreign reserves fell to $39.5bn.
Emefiele said, “It was very clear, the reason why Nigeria’s rating was moved from overweight to just market weight. I don’t think it is important for me to say what they said.
“It is not as a result of certain failure on the part of the Central Bank of Nigeria. Most importantly one thing they have said very clearly is that Nigeria has been left out as an overweight country because they felt that as an oil producing country, in relation to reserves in the midst of an increase in oil price should result in increase in reserves.
“And since they are seeing that this is not happening, that it is the reason Nigeria’s weight has been brought from overweight to market weight.”