Market News

By Sodeinde Temidayo David

In five days, the total value of transactions at the Investors and Exporters (I&E) segment of the foreign exchange (forex) market stood at $1.0 billion.

This was from the data gathered by Business Post from the FMDQ Securities Exchange, which tracks transactions at the official exchange window of the country.

It was observed that the turnover achieved at the I&E window last week was 38.5 per cent or $278.5 million higher than the $724.1 million recorded at the preceding week.

The value of transactions by FX traders at the market segment was between Monday, September 13 and Friday, September 17, 2021.

The information gathered by this newspaper showed that the turnover recorded a significant rise as a result of the panic witnessed at the forex market last week as the value of Naira was being battered by the demand for foreign currencies, especially the Dollar, at the black market.

Both offshore and domestic investors were converting their Naira holdings to Dollars to protect the value of their investments in the country.

A breakdown of the daily transactions showed that last Monday, the value of traders stood at $229.79 million and the next day, it went down to $126.96 million.

At the midweek session, the turnover skyrocketed to $308.92 million before coming down to $175.10 million and further down to $161.82 million at the last trading session of the week.

It was observed that the turnover last Wednesday occurred ahead of the Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN) and investors were sceptical of the outcome, especially when at the previous MPC meeting, the apex bank announced the ban on the sale of FX to Bureaux De Change (BDC) operators.

Last Friday, while addressing newsmen after the two-day meeting, Mr Godwin Emefiele, Governor of the CBN, maintained that the ban remains and further said all forex users should use the I&E rate for their transactions, indicating that there was no more parallel market rate.

A look at the performance of the local currency at the I&E segment during the week indicated that it depreciated against the Dollar by 0.21 per cent or 88 kobo, closing at N412.88/$1 in contrast to the preceding week’s N412.00/$1.

Analysis showed that on Monday, the domestic currency was exchanged at N412.75/$1 but appreciated to N412.08/$1 on Tuesday and was further strengthened to N412.06/$1 on Wednesday before crashing to N413.07/$1 on Thursday and then appreciated to N412.88/$1 the next day.

At the interbank segment, the domestic currency lost 9 kobo or 0.02 per cent against the US Dollar to close at N410.57/$1 compared with the previous week’s N410.48/$1.