The Central Bank of Nigeria (CBN) has advised financial institution treasurers to take steps to protect their companies’ financial well-being.
Muhammad Abdullahi, Deputy Governor, Economic Policy Directorate, announced this during the Financial Markets Association of Nigeria’s ninth annual Financial Markets Conference in Lagos, which was themed ‘Global Economic and Domestic Outlook: Implications for Nigerian Treasurers.’
Abdullahi, who was represented by CBN Director, Financial Markets Department, Omolara Duke, stated that in light of the global economic condition, treasurers should strategically position themselves to manage the changing trend and maximise the good influence on financial markets.
“So, (as) our exceptional treasurers, you bear the burden of relentlessly managing the ever-changing opportunities and difficulties posed by global dynamics while also safeguarding the financial health of your businesses. Treasurers and financial specialists must comprehend the interconnectedness of the global and economic systems. The capacity to strategically place Treasury actions to handle the emerging global trend will have a big impact on our home markets,” he stated.
According to Abdullahi, the slowdown in global inflation is expected to continue in 2025, particularly in terms of the central bank’s long-term inflation targets.
He stated that the FMDA has demonstrated tremendous strength, as evidenced by its tenacity in encouraging its members to embrace and implement the new policies.
Other speakers at the event include Managing Director/Chief Executive Officer, Optimus Bank Ltd., Dr. Ademola Odeyemi, MD/CEO Financial Derivatives Co. Ltd., Bismarck Rewane, who spoke on ‘Navigating the Regulatory Landscape: The Treasurer’s Role in Driving Economic Growth’ and ‘Strategies for Managing Inflation and Interest Rate Risks in a Volatile Economy’ and Ifeanyi Edward, who spoke on ‘Effective Risk Management and Hedging Strategies for Treasury in Uncertain Time. All of the presenters focused on the hazards involved with treasurers’ jobs and how they should maintain the viability of their financial institutions.
Rewane advocated for a balanced monetary policy to prevent inflation-driven asset bubbles and stabilise the stock market. He said that rising interest rates make fixed-income investments more appealing, potentially driving capital away from equity.
Rewane stated, “Investors may move allocations to shorter-duration bonds to reduce duration risks. Furthermore, interest-sensitive industries (e.g., real estate and utilities) may underperform due to increased borrowing costs. Companies that rely on debt funding have greater interest expenses, which may reduce profitability.
According to Rewane, higher interest rates frequently lower consumer spending and demand while raising returns, resulting in more activity in bond markets even while demand for floating-rate securities may grow.
The Financial Markets Dealers Association of Nigeria represents registered deposit money banks and other financial market institutions in Nigeria, with a focus on regulatory policy involvement, advocacy, and professional ethics in the financial market.
