By Modupe Gbadeyanka
As the sophistication of the global financial markets remains on the rise, the need to maximise the opportunities which abound in these vis-à-vis the risks inherent becomes increasingly important.
Hedging against risks of price movements in the market, therefore, remains strategically important owing to the volatile nature of currencies and the possible level of business exposures to these.
Progressively, therefore, following the 1-year anniversary of the launch of the Naira-settled OTC FX
Futures market in Nigeria, $657.57 million of the 13th OTC FX Futures contract, NGUS JUL 19 2017 at $/₦363.67 matured and was settled on FMDQ on Wednesday, July 19, 2017.
The matured contract, which settled at the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate of $/₦365.33, had, unlike the 12th contract in June 2017, settled at a rate higher than the respective contract prices agreed at the point of execution of the contracts, resulting in a net payout to holders of the contract.
The credibility of the market and its operational modalities are again highlighted; and the effectiveness in and indeed importance of risk management for the Nigerian FX market are further demonstrated.
Till date, over $7.00 billion worth of contracts have so far traded on the FMDQ platform, with about $5.00 billion matured, whilst $2.00bn remain open.
Undoubtedly, the resilience in maintaining this market and ensuring its viability and sustainability, have remained of paramount importance to the CBN, market participants and FMDQ.
Steps and requisite infrastructure shall continually be put in place to support the FMDQ objective of making the Nigerian markets globally competitive.
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