The Central Bank of Nigeria has barred individuals and local non-financial firms from buying high-yielding central bank bonds as it tries to boost the economy by steering lending more widely.
The two types of investors are excluded from participating in auctions for open-market operations, which are short-term central bank securities.
According to Isaac Okorafor, central bank’s spokesman, the apex bank do not want to leave room for arbitrage “It will discourage banks from giving loans to “speculators” who want to buy government securities instead of investing in the “real economy.”
The measures are in line with a wider policy to penalize banks that don’t boost lending, according to Okorafor. The ban’s impact may be limited because it does not extend to the secondary market or foreign portfolio investors.