This is because the factors that will prevent default, neutralise the negative impact of the devaluation of domestic currency on repayment as well as mitigate currency risk like foreign exchange earning assurance and derivatives contracts are not fully operational.
They also noted that due to structural bottlenecks, organisations and institutions cannot efficiently adjust their goals and resources to changing constraints and opportunities, which has weakened the effectiveness of monetary policy initiatives. Anono stressed the need for banks to borrow in local currency and structure their financing through the capital markets to ensure that the transactions are bankable, and the costs reflect reality.
Access Bank Plc recorded a successful launch of a $500 million 144A/RegS Senior Unsecured Eurobond as part of its global medium-term note programme. Egbo urged the government to maintain stability in exchange rate to enable banks to service the loans and also add value to shareholders’ investment. He pointed out that if the borrowing is judiciously applied, the benefits to the banks and economy are monumental.