The Central Bank of Nigeria has instructed treasurers of financial institutions to implement measures to protect their organisations’ financial well-being.
Deputy Governor, Economic Policy Directorate, Muhammad Abdullahi, disclosed this during the eighth annual Financial Markets Conference organised by the Financial Markets Association of Nigeria in Lagos, under the theme, ‘Global Economic and Domestic Outlook: Implications for Nigerian Treasurers.’
Abdullahi, who was represented by CBN Director, Financial Markets Department, Omolara Duke, noted that in the face of the global economic situation, treasurers should strategically position themselves to navigate the evolving trend and optimise the positive impact on the financial markets.
“So, (as) our distinguished treasurers, you bear the responsibility to relentlessly manage the ever-evolving opportunities and challenges presented by global dynamics and safeguard the financial health of your organisations. As treasurers and financial experts, you must recognise the interconnectivity of the global and economic system. The ability to tactically position treasury activities to manage the evolving global trend will have significant implications on our domestic markets,” he said.
Abdullahi said the deceleration in global inflation is projected to continue in 2025, particularly towards the long-run inflation targets of the central bank.
He said that FMDA has continued to show formidable strength, as exemplified by its doggedness in leading its members to embrace adopting and implementing 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 Times.’ All the speakers highlighted the risks associated with the job of treasurers and how they should protect the health of their financial institutions.
Rewane called for balanced monetary policies to prevent inflation-induced asset bubbles and stabilise the stock market. He explained that rising interest rates make fixed-income investments more attractive, potentially pulling capital out of equities.
Rewane said, “Investors may shift allocations to shorter-duration bonds to minimise duration risks. Also, interest-sensitive sectors (e.g., real estate, utilities) may underperform due to higher borrowing costs. Companies reliant on debt financing face higher interest expenses, which may erode profitability.”
According to Rewane, higher interest rates often reduce consumer spending and demand while increasing yields, leading to more activity in bond markets even as demand for floating-rate instruments may increase.
The Financial Markets Dealers Association of Nigeria is a body of licensed deposit money banks and other financial market institutions operating in Nigeria with an emphasis on regulatory policy engagement, advocacy, and professional ethics in the financial market.
