Analysts, both foreign and local, in the financial services sector, yesterday gave a nod to the move by the Federal Government to replace about N900billion of domestic debts with US$3 billion of foreign debts, saying it is positive for interest rates, exchange rate and the real sector of the economy.

Kemi Adeosun, Minister of Finance, announced on Wednesday at the end of the Federal Executive Council (FEC) meeting that Nigeria will raise new dollar denominated debts to replace $3 billion worth of maturing naira-denominated short-term treasury bills, to lower debt service costs and improve its debt position as the economy recovers from a recession. Adeosun said the government could borrow at a cost of 7 percent overseas, roughly half the interest rate it currently pays locally. Interest rates on treasury bills currently average between 18% to 22%.