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Nigeria’s dollar bonds inched higher by over 1-1.3 points across the curve after two positive announcements. First, the finance minister said that he expects the country to receive $10bn of inflows “in weeks rather than months”. This could help ease the liquidity crunch on the currency given the shortage of dollars and falling forex reserves that stand at $33bn, down over 10% YTD. The minister said that the President Bola Tinubu signed two executive orders to allow domestic issuance of instruments in foreign currency and also allow all cash outside the banking system to be brought into the banks. He did not provide any further details. Last week, Nigerian dollar bonds fell by 1-2 points across the curve after its central bank allowed the currency to depreciate 8.9% to 848.12 against the dollar in the official market. Also, the government’s targeting of revenue growth by reforming tax laws should help cut its loan service ratio by half in the medium-term, the head of their Debt Management Office said. This would also see them move closer to other OECD nations’ tax collection levels, he added. In 2021, Nigeria’s tax revenues-to-GDP stood at 10.9%, well below the 34.1% average of OECD members.
Nigeria’s 7.375% 2033s were up 1.3 points to trade at 73.04, yielding 12.12%.