• Friday, March 29, 2024
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FX weekly turnover declines by 35.62%

Re-evaluating the N2.4 billion invalid forex transactions
Total foreign exchange weekly turnover in the Spot, Forwards and Futures markets, declined by 35.62 percent to $$688.72 million, for the week ended June 11, 2021, from $1,069.71 million reported for the week ended June 4, 2021.

Read Also: Naira ends week strong at official market

The week-on-week (WoW) decrease in turnover was driven largely by the 20.55 percent ($139.06 million) decrease in the FX Spot turnover, a report by FMDQ said.
The Central Bank of Nigeria (CBN) had assured of an increase in foreign exchange allocation to banks to boost liquidity and meet customers’ requests, particularly for travel allowances, payment of tuition and medical fees, among other invisibles.
The report noted that the WoW drop in FX Derivatives turnover was driven by the sharp decline of 81.11 percent ($246.09 million) in FX Futures turnover, resulting in a 14.81 percentage points reduction in FX Derivatives’ contribution to total FX market turnover from 36.73 percent recorded in the previous week to 21.92 percent.
 In the Investors’ & Exporters’ (I&E) FX market, the total value of transactions for the week ended June 11, 2021, was $537.74 million, representing a decrease of 20.55% ($139.06 million) from $676.80million traded in the week-ended June 4, 2021.
For the week-ended June 11, 2021, the weekly average Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate was $/N410.25 compared to $/N410.74 recorded in the previous week ended June 4, 2021, representing an appreciation of the Naira against the United States (US) Dollars by $/N0.49k.
 In the Bureau-de-Change (BDC) market, the Naira depreciated against the US Dollars by $/N3.80 to close the week-ended June 11, 2021, at an average rate of $/N498.80, representing a 0.77 percent depreciation when compared to $/N495.00 recorded in the previous week.
Consequently, the spread between the weekly average BDC rate and NAFEX rate increased WoW by 5.10 percent ($/N4.29) to $/N88.55 in the week-ended June 11, 2021, from $/N84.26 recorded in the previous week.
In the FX Futures market, $57.31 million worth of FX Futures contracts were traded in nine deals, representing a WoW decrease of 81.11 percent ($246.09 million) when compared to $303.40 million traded in four deals recorded in the week-ended June 4, 2021.
Naira steadied at N502 per dollar since the week at the black market.
On Thursday after the bankers’ committee meeting,  Nneka Onyeali-Ikpe, managing director/CEO, Fidelity Bank Plc noted the CBN’s instruction to all banks to make sure there is the availability of FX at all times for anybody who want to buy Business Travel Allowance (BTA), Personal Travel Allowance (PTA), medical fees, student school fees and all the eligible invisible purchases, to ensure that Nigerians are not forced to go and use the parallel market.
“What we have been instructed to do is to ensure that we do not turn anybody back and that we should request from the CBN once we exhaust the stock we have. So this very good news and the idea is to have a hitch-free summer period and resumption of schools for children to go back to school. So the idea is to ensure that there is less pressure on the FX and then the rates will come down,” she said.
Throwing more light on this, Herbart Wgwe, group managing director/CEO, Access Bank Plc, said the committee highlighted the need for banks to support SMEs who import small raw materials to set up their businesses.