Foreign exchange transactions among investors, exporters window drops 24.56%
Over-the-counter foreign exchange transactions for investors and exporters fell 24.56 percent last week, according to FMDQ Securities Exchange Limited.
The Central Bank of Nigeria had, in April 2017, amid a severe currency shortage, established the I&E window with the aim of increasing liquidity in the foreign exchange market and ensuring timely execution and settlement. eligible transactions.
The total value of over-the-counter I&E transactions stood at $ 415.05 million last week, up from $ 550.14 million the week before, according to FMDQ Exchange.
He said total revenue in the spot and forex derivatives markets fell to $ 539.47 million from $ 692.60 million reported the previous week.
The exchange said the week-over-week increase in revenue was due to the drop of 24.56 percent ($ 135.09 million) and 12.66 percent (18, $ 04 million) of cash and forex derivatives sales, respectively.
He said the decline in forex derivatives revenue was jointly due to the 4.92 percent and 100 percent decline in revenue from forex futures and futures contracts. the forex respectively.
FMDQ Exchange said the average Nigerian autonomous currency fixation rate was N / $ 411.22, up from N / $ 411.17 the week before, which represents a depreciation of the naira against the dollar of 0.01%. .
He said that in the parallel market, the naira depreciated against the dollar by 1.02 percent at an average exchange rate of N / $ 515.80, against the N / $ 510.60 recorded in the previous week.
The Nigerian forex market is segmented with several exchange rates, with the most important rate being the I&E window, according to Financial Derivatives Company Limited.
FDC analysts, in a report released on Friday, said: âNo less than 55-60% of Nigerian foreign exchange transactions are traded at this window. CBN and most exporters and investors use this window.
âIt serves not only as a source of price discovery, but also as a barometer to measure the potential and actual intervention of the CBN in the market. Some of the determinants of the exchange rate are the balance of payments, capital inflows and the trade balance.
FDC analysts said speculative activity in the parallel market will keep the exchange rate volatile over the coming weeks.
âHowever, upon receipt of the $ 3.35 billion IMF SDR credit due on August 23, we expect gross external reserves to increase to around $ 34 billion. This will provide more support for the CBN to support the currency and lead to further exchange rate convergence around the I&E window, âthey added.
All rights reserved. This material and any other digital content on this website may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without the express prior written permission of PUNCH.
Contact: [emailÂ protected]