As inflationary pressure persists in Nigeria, fueled by volatility in foreign exchange rates and sharp increases in monetary policy rate, corporate treasurers have been told to adopt proactive strategies to safeguard their organisations’ financial health.
The Managing Director and Chief Executive Officer, FBN Holdings, Mr. Olusegun Alebiosu, offered this advice at the just concluded 3rd annual Treasury 360 Conference and Exhibition of the Association of Corporate Treasurers of Nigeria (ACTN) with the theme: “Policy Implications & Building Sustainable Treasury Strategies: Nigerian Perspectives on Tackling Inflation and Interest Rate Uncertainty.”
The event, which drew participants from corporate organisations, economic and financial industry, highlighted aggressive orthodox policy measures of the Central Bank of Nigeria (CBN) in the last one year with all the devastating negative impacts on financial planning and effective cost management against broader macroeconomic challenges.
Presenting lead keynote address, the First Bank Chief Executive accurately predicted a sustained upward trajectory in inflation rates which could compel the CBN to maintain its assertive steps to stabilise the macroeconomic environment.
“The CBN has raised the Monetary Policy Rate (MPR) by an unprecedented 850 basis points since the start of the year, reaching 27.25 per cent.
Simultaneously, the Cash Reserve Ratio (CRR) for Deposit Money Banks (DMBs) surged from 32.5 per cent to an all-time high of 50 per cent.
These decisive measures aim to counter inflationary pressures by curbing excess liquidity and preserving yield on investments,” said FBNH boss who was represented by his deputy.
While acknowledging the difficult challenges corporate treasurers are grappling with, Mr. Alebiosu urged them to constantly revisit their pricing models to align with real-time market data, minimise cashflow inefficiencies, and maximize returns through highyield money market instruments.
As part of his key recommendations, Alebiosu said that strategic investment decisions now required urgency to counter inflation’s erosive impact on capital.
