September 13, 2021/Proshare
Below is the commentary on the Foreign Exchange (FX) market with data for the week-ended September 10, 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 weeks ended September 3 & 10, 2021.
- In the FX Spot and Derivatives markets, the total turnover for the week-ended September 10, 2021, was $876.91 million, representing a decrease of 17.07% ($180.44 million) from $1,057.35 million reported for the week-ended September 3, 2021. The week-on-week (WoW) decrease in total turnover was driven by the 17.25% ($108.57 million) and 16.79% ($71.87 million) decreases in FX Spot and FX Derivatives turnover, respectively. (See Table 1 below)
- The WoW decrease in FX Derivatives turnover was driven by the 55.75% ($236.75 million) decrease in FX Forwards turnover, despite the 4,958.09% ($164.87 million) increase in FX Futures turnover
- In the FX Spot market, the total value of transactions for the week-ended September 10, 2021, was $520.77 million, representing a decrease of 17.25% ($108.57 million) from the value of transactions executed in the week-ended September 3, 2021 ($629.34 million)
Table 1: Weekly FX Turnover Analysis
- For the week-ended September 10, 2021, the average Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate was $/N25, compared to $/N411.29 recorded in the previous week-ended September 3, 2021, representing an appreciation of the Naira against the United States (US) Dollar by 0.01% ($/N0.04)
- In the parallel market, the Naira depreciated against the US Dollar by 1.10% ($/N5.80) for the week-ended September 10, 2021, at an average exchange rate of $/N532.00, compared to the $/N526.20 recorded in the previous week. Consequently, the spread between the average NAFEX rate and parallel market exchange rate increased WoW by 5.08% ($/N5.84) to $/N120.75 in the week-ended September 10, 2021, from $/N114.91 recorded in the previous week. (See Table 2 below).
Table 2: Weekly FX Rate Analysis
- In the FX Futures market, $168.20 million worth of FX Futures contracts were traded in eight (8) deals, representing a WoW increase of 4,951.05% ($164.87 million) when compared to $3.33 million traded in one (1) deal recorded in the week-ended September 3, 2021