FMDQ Fixed Income Currency Operations Rise 13.7% in July

By Adedapo Adesanya

FMDQ Securities Exchange achieved a 13.7 per cent growth in its turnover in its Fixed Income and Currency (FIC) operations in the month of July.

Data from the exchange said the turnover for the month rose to N18.7 trillion from N16.5 trillion achieved in June 2020.

Giving a breakdown, a report from FMDQ indicated that open market operations (OMO), money market transactions and unsecured placements remained the highest contributors to the FIC markets in the month under review.

Specifically, they all accounted for 60.2 per cent of the total FIC market turnover against 55.4 per cent posted in the preceding month.

The report stated that total foreign exchange (FX) market turnover stood at $10.8 billion or N4.20 trillion, indicating a month-on-month increase of 25.4 per cent against $8.63 billion or N3.34 trillion in June.

Further analysis of the FX market turnover indicated that FX Derivatives accounted for 70.3 per cent ($1.5 billion) of the total month-on-month increase in FX market turnover achieved in July.

In the Over-the-Counter (OTC) foreign exchange (FX) futures market, the near month contract (NGUS JUL 29 2020) with a total outstanding notional value of $1.37 billion matured and was settled, while a new long-term (60-month) contract, (NGUS JUL 30 2025) was introduced at a rate of N581.52/$.

The exchange noted that “On July 7, the Central Bank of Nigeria (CBN) Official Spot US$/N exchange rate closed at N381/$, representing a decrease of $/N20 in the Official Spot FX rate compared to the closing rate of N361/$ as at July 6, 2020.

“Further, this represents the first $/N FX rate devaluation by the CBN since March 20, 2020, when the Official Spot FX rate was adjusted to N361.00 per Dollar from N307/$.

“Consequently, the CBN Official Spot FX rate closed at an average of N377.19/$ in July 2020, representing a decrease of 4.48 per cent (N16.19/$) from N361.00/$ recorded in June 2020.

“At the Investors’ and Exporters’ (I& E) FX Window, the Naira depreciated against the US Dollar, losing 0.28 per cent (N1.09/$) to close at an average of N387.48/$ in July 2020 from N386.39/$ recorded in June.

“Similarly, in the parallel market, the Naira depreciated against the US Dollar losing 3.38 per cent (N15.29/$) to close at an average of 467.67/$ in July 2020 from 452.38/$ recorded in June.”