June 14, 2021/Proshare

by FMDQ

Below is the commentary on the Foreign Exchange (FX) market with data for the week-ended June 11, 2021. The table following the commentary compares Spot FX weekly turnover for trades between banks (FMDQ Dealing Member (Banks) [DMBs]/Authorised Dealers) and their clients for the week ended June 4 & June 11, 2021.

• In the FX Spot, Forwards and Futures markets, the total turnover for the week-ended June 11, 2021, was $688.72 million, representing a decrease of 35.62% ($380.99 million) from $1,069.71 million reported for the week-ended June 4, 2021. The week-on-week (WoW) decrease in turnover was driven largely by the 20.55% ($139.06 million) decrease in the FX Spot turnover. (See Table 1 below)
• The WoW drop in FX Derivatives turnover was driven by the sharp decline of 81.11% ($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% recorded in the previous week to 21.92%
• 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 $676.80 million traded in the week-ended June 4, 2021   

 Table 1: Weekly FX Turnover Analysis

• 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 $/N0.49  
• 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% depreciation when compared to $/N495.00 recorded in the previous week. Consequently, the spread between the weekly average BDC rate and NAFEX rate increased WoW by 5.10% ($/N4.29) to $/N88.55 in the week-ended June 11, 2021, from $/N84.26 recorded in the previous week. (See Table 2 below)
  

Table 2: Weekly FX Rate Analysis

• In the FX Futures market, $57.31 million worth of FX Futures contracts were traded in nine (9) deals, representing a WoW decrease of 81.11% ($246.09 million) when compared to $303.40 million traded in four (4) deals recorded in the week-ended June 4, 2021.