August 9, 2021/Proshare
By FMDQ
Please see below commentary on the Foreign Exchange (FX) market with data for the week-ended August 6, 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 July 30 & August 6, 2021.
- In the FX Spot and Derivatives markets, the total turnover for the week-ended August 6, 2021, was $677.44 million, representing a decrease of 24.93% ($225.01 million) from $902.45 million reported for the week-ended July 30, 2021. The week-on-week (WoW) decrease in turnover was jointly driven by the 17.02% ($100.49 million) and 39.89% ($124.51 million) decrease in the FX Spot and FX Derivatives turnover, respectively. (See Table 1 below)
- The WoW decrease in FX Derivatives turnover was jointly driven by the 7.39% ($14.98 million) and 100.00% ($109.54 million) decrease in FX Forwards and FX Futures turnover respectively, resulting in a decrease in FX Derivatives’ contribution to total FX market turnover to 27.69%, from 34.58% recorded in the previous week
- In the Investors’ & Exporters’ (I&E) FX market, the total value of transactions for the week-ended August 6, 2021, was $489.85 million, representing a decrease of 17.02% ($100.49 million) from the value of transactions executed in the week-ended July 30, 2021 ($590.34 million)
Table 1: Weekly FX Turnover Analysis
For the week-ended August 6, 2021, the average Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate was $/N411.16, compared to $/N411.18 recorded in the previous week-ended July 30, 2021, representing an appreciation of the Naira against the United States (US) Dollar by 0.01% ($/N0.02)
- In the parallel market, the Naira appreciated against the US Dollar by 0.23% ($/N1.20) for the week-ended August 6, 2021, at an average exchange rate of $/N510.80, compared to the $/N512.00 recorded in the previous week. Consequently, the spread between the average parallel market exchange rate and NAFEX rate decreased WoW by 1.17% ($/N1.18) to $/N99.64 in the week-ended August 6, 2021, from $/N100.82 recorded in the previous week. (See Table 2 below)
Table 2: Weekly FX Rate Analysis
- In the FX Futures market, there were no trades executed in the week-ended August 6, 2021
