The total foreign exchange turnover in the Spot, Forwards and Futures markets for the week-ended July 2, 2021, dropped by 5.02 percent ($40.58m) to $767.44 million, from $808.02 million reported for the week-ended June 25, 202, according to a report by the FMDQ.
The week-on-week (WoW) decrease in turnover was jointly driven by the 4.11% ($25.24m) and 7.90% ($15.34m) decrease in the FX Spot and FX Derivatives turnover, respectively.
The WoW decrease in FX Derivatives turnover was driven by the 19.79% ($22.29m) decrease in FX Futures turnover, resulting in a 0.73 percentage points decrease in FX Derivatives’ contribution to total FX market turnover from 24.04% recorded in the previous week to 23.31 percent
In the Investors’ & Exporters’ (I&E) FX market, the total value of transactions for the week-ended July 2, 2021, was $588.54 million, representing a decrease of 4.11 percent ($25.24m) from the value of transactions executed in the week-ended June 25, 2021 ($613.78m).
For the week-ended July 2, 2021, the average Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate was $/N10.74, compared to $/N410.85 recorded in the previous week-ended June 25, 2021, representing an appreciation of the naira against the dollar by 0.03% ($N0.11)
In the parallel market, the naira depreciated against the dollar by 1.21 percent ($/N6.00) to close the week-ended July 2, 2021, at an average exchange rate of $/N500.00, compared to $/N494.00 in the previous week.
Consequently, the spread between the average parallel market exchange rate and NAFEX rate increased WoW by 7.34 percent ($/N6.11) to $/N89.26 in the week-ended July 2, 2021, from $/N83.15 recorded in the previous week.
In the FX Futures market, $90.35 million worth of FX Futures contracts were traded in 13 deals, representing a WoW decrease of 19.80 percent ($22.30m) when compared with $112.65 million traded in 11 deals recorded in the week-ended June 25, 2021
Still in the FX Futures market, the 60th FX Futures contract, NGUS JUN 30 2021, matured and settled on FMDQ Exchange on Wednesday, June 30, 2021.
The foreign exchange market ended the five trading days on Friday with Nigeria’s currency appreciating marginally across market segments following increased liquidity.
Naira/dollar exchange rate closed flat at N380.69/USD at the Interbank Foreign Exchange market amid weekly injections of $210 million by CBN into the forex market, a report by Cowry Asset Management Limited noted.
A breakdown of the disbursement showed that $100 million was allocated to Wholesale Secondary Market Intervention Sales (SMIS), $55 million was allocated to Small and Medium Scale Enterprises and $55 million was sold for invisibles.
Elsewhere, the naira/USD exchange rate rose (depreciated) for all of the foreign exchange forward contracts: 1 month, 2 months, 3 months, 6 months and 12 months exchange rates rose by 0.08 percent, 0.27 percent, 0.23 percent, 0.45 percent and 0.51 percent to close at N413.43/USD, N416.17/USD, N418.11/USD, N424.09/USD and N435.74/USD, respectively.
Meanwhile, the spot rate remained flat at N379.00/USD. “In the new week, we expect naira to weaken against the greenback at most FX Windows amid declining external reserves which suggests a weakening capacity of the apex bank to continue to defend the local currency,” analysts at Cowry Asset Management Limited said.
