A turnover of $1.3 billion was recorded on the Investors’ & Exporters’ FX window for the week ended March 23, 2018, data from the FMDQ OTC Securities Exchange (FMDQ), show.
For the week-ended March 23, 2018, trading activity in the Spot FX market between the Deposit Money Bank’s and their clients stood at $1,348.12 million (average daily turnover of $269.62m), representing 16.90 percent decrease from the $1,622.29 million (average daily turnover of $324.46m), recorded the previous week-ended March 16, 2018.
Still within the week, a review of trading activity in the Spot FX market amongst banks revealed a 28.31 percent decrease, as a total turnover of $209.88 million (average daily turnover of $41.98m) was recorded, against the $292.77m (average daily turnover of $58.55m) reported the previous week-ended March 16, 2018.
The I&E FX Window, the total value of trades recorded for the week-ended March 23, 2018 stood at $0.96 billion. This represents a decrease of 36.42 percent ($0.55bn) when compared to the $1.51 billion traded in the previous week, bringing the total value traded at the Window year-to-date to $13.92 billion, data from FMDQ revealed.
Also, the CBN official rate fell by N0.05 to close at N305.865/$ as at March 23, 2018, indicating a 0.02 per cent appreciation when compared to N305.70/$ recorded the previous week-ended March 23, 2018.
In the Bureau de Change (BDC) market, still at the end of reporting week, the exchange rate, remained unchanged to close at $/N363.00.
For the reporting week-ended March 29, 2018, the Naira depreciated at the I&E FX Window, losing N0.14 as the rate opened the week at N360.10/$, and closed at N360.20/$, resulting in a spread of N2.80/$ between the BDC market rate and I&E FX Window rate.
On the other hand, the spread between the BDC market rate and the CBN official exchange rate fell by N0.o5 to close at N57.35/$, indicating a 0.09 percent decrease from the N57.30/$ recorded in the previous week.
In the OTC FX Futures market, the 21st OTC FX Futures contract, NGUS MAR 28 2018, with notional amount $437.52 million, matured and settled on Wednesday, March 28, 2018. This maturity brings the total value of matured OTC FX Futures contracts on FMDQ, since its inception (June 2016) to circa $8.46 billion.
The CBN introduced a new contract, NGUS MAR 27 2019 for $1.00 billion at $/N361.96, to replace the matured contract and refreshed its quotes on the existing 1- to 11-month contracts.
During the reporting week, $58.24 million worth of OTC FX Futures contracts were traded in twenty (20) deals, compared to the previous week’s total of $96.89 million traded in ten (10) deals.
More petrodollars mean the Central Bank of Nigeria (CBN) has seen improved dollar flows, while the introduction of a market-determined window called the Investors’ and Exporters’ window in April 2017 has meant autonomous inflows are up and running.
Foreign inflows have responded to rallying oil prices and improved dollar liquidity in Nigeria, as inflows through the CBN turned positive in 2017 for the first time since 2012, according to data compiled by BusinessDay and sourced from a report on the apex bank’s website that put net inflows at $12 billion.
Inflation also quickened to an 11-year high of 18 percent, double the CBN’s preferred band of 6-9 percent; to curtail inflation and stem the tide of portfolio outflows, the apex bank has kept interest rates at a record high 14 percent since July 2016.
Since then, inflation has cooled, sliding the 12th straight month to 15.13 percent in January 2018, while the economy exited recession in the second quarter of 2017 and posted a full-year growth of 0.8 percent compared to a 1.6 percent contraction in 2016.
Despite these, the economy remains at risk to external shocks as another oil price rout could put paid to gains recorded thus far, even as economic growth below 6 percent is likely to elude Africa’s most populous nation which produces people at the rate of 3 percent annually.
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