MARKET NEWS

Please see below commentary on the Foreign Exchange (FX) market with data for the week-ended July 9, 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 2 & July 9, 2021. 

• In the FX Spot, Forwards and Futures markets, the total turnover for the week-ended July 9, 2021, was $663.04 million, representing a decrease of 13.60% ($104.40 million) from $767.44 million reported for the week-ended July 2, 2021. The week-on-week (WoW) decrease in turnover was jointly driven by the 11.97% ($70.44 million) and 18.98% ($33.96 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 6.62% ($5.86 million) and 31.09% ($28.09 million) decrease in FX Forwards and FX Futures turnover respectively, resulting in a 1.45 percentage points decrease in FX Derivatives' contribution to total FX market turnover to 21.86%, from 23.31% recorded in the previous week

• In the Investors' & Exporters' (I&E) FX market, the total value of transactions for the week-ended July 9, 2021, was $518.10 million, representing a decrease of 11.97% ($70.44 million) from the value of transactions executed in the week-ended July 2, 2021 ($588.54 million)

 Table 1: Weekly FX Turnover Analysis

• For the week-ended July 9, 2021, the average Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate was $/N411.28, compared to $/N410.74 recorded in the previous week-ended July 2, 2021, representing a depreciation of the Naira against the United States (US) Dollar by 0.13% ($/N0.54)

• In the parallel market, the average exchange rate remained unchanged at $/N500.00 for the week-ended July 9, 2021. Consequently, the spread between the average parallel market exchange rate and NAFEX rate decreased WoW by 0.60% ($/N0.54) to $/N88.72 in the week-ended July 9, 2021, from $/N89.26 recorded in the previous week. (See Table 2 below)

Table 2: Weekly FX Rate Analysis

• In the FX Futures market, $62.26 million worth of FX Futures contracts were traded in six (6) deals, representing a WoW decrease of 0.31% ($28.09 million) when compared to $90.35 million traded in thirteen (13) deals recorded in the week-ended July 2, 2021