Following the Central Bank of Nigeria’s (CBN) restriction of the Open Market Operations (OMO) purchase by individuals and small businesses, there has been a decline in interest rates to an 18-month low of 13.03%1. Primary market interest rates (particularly the treasury bill market) has also fallen into single digits as recent auctions saw rates as low as 7.7%2. While the restrictive policy resulting in lower interest rates can help reduce government’s borrowing costs, it could have adverse effect on investor confidence — ultimately leading to a reduction in capital flows, external reserves and thus exchange rate. Although the CBN reassures investors that it would be a buyer of last resort where investors do not find buyers in the secondary market, there may be need to minimize regulator interference. This is on the basis that investors tend to avoid a market structure with over-interference by the regulators.