A financial analyst, Kalu Ajah, has said the possible reasons manufacturing firms are declaring losses in the era of foreign exchange (FX) revaluation whereas banks are declaring profits in the same economy is because banks have better treasury teams. Banks, last year, recorded extra-ordinary profits against the backdrop of foreign exchange revaluation gains arising from depreciation of the naira. About 63.6 percent, amounting to N1.457 trillion of the profit came from foreign exchange related transactions. “The in-house treasury team will buy derivative products like Forwards and Swaps to hedge open dollar import positions,” the analyst wrote on his X handle. The treasury team can also borrow in FX offshore and sell in commodities from Nigeria.

Source: Nigerian Tribune February 05, 2024 12:15 UTC