CBN fixed-income market plans are under review as Nigeria reconsiders a proposal that would have given the central bank control over trading and settlement of bonds and other securities, Bloomberg reports.
Although the CBN presented the move as a way to improve transparency and efficiency in market operations, it has sparked concerns about concentrating too much power.
CBN Fixed-Income Under Review
A source familiar with the discussions said the finance ministry, the Securities and Exchange Commission (SEC), and the CBN are actively examining the proposal.
Moreover, the source added that authorities will likely withdraw it within a month because existing laws prevent such a transfer of authority.
The source spoke on condition of anonymity due to the confidential nature of the talks.
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Market Concerns
At present, most Nigerian bonds and fixed-income instruments trade on FMDQ OTC Plc, which uses a platform provided by Bloomberg LP.
Additionally, the Nigerian Exchange Limited (NGX) facilitates trading, and its spokesman confirmed that traders continue operations as usual.
Market participants have warned that shifting trading and settlement to the central bank could weaken SEC oversight and blur the line between monetary policy and market regulation.
Consequently, experts stress that Nigeria must maintain a careful balance between regulatory authority and central bank control to protect its fixed-income market, one of Africa’s largest.
