Forex trades at I&E window drop 17% – Economic Confidential
Forex trades at I&E window drop 17%
Over-the-counter investors and exporters (I&E) foreign exchange transactions fell 17.2% 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 I&E window transactions stood at $ 489.85 million last week, a decrease of 17.02% ($ 100.49 million) from $ 590.34 million the previous week , according to FMDQ Exchange.
He said total revenue in the spot and forex derivatives markets was $ 677.44 million, down 24.93 percent ($ 225.01 million) from 902, $ 45 million reported the previous week.
The Exchange said the week-over-week drop in revenue was jointly due to the decline of 17.02 percent ($ 100.49 million) and 39.89 percent (124, $ 51 million) of cash and forex derivatives sales, respectively.
He said the decline in forex derivatives revenue was jointly due to the 7.39 percent ($ 14.98 million) and 100 percent ($ 109.54 million) decline in revenue. forex futures contracts and forex futures contracts respectively.
He added that the contribution of forex derivatives to total forex market turnover fell to 27.69% from 34.58% recorded 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 last week, said: “No less than 55-60% of Nigerian foreign exchange transactions are traded at this window. CBN and most exporters and investors use this window.
“It 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.
Analysts, led by Bismarck Rewane, said panic buying and profits will continue to influence parallel market dynamics, while the I&E window will be governed by market forces of demand and l ‘offer.
“Forex rationing will continue to force manufacturers to use a blended rate and this will keep the cost of raw materials high,” they added.
FMDQ Exchange said the Nigerian Autonomous Exchange Fixing Rate averaged N / $ 411.16 last week, up from $ 411.18 / N recorded the week before, representing an appreciation of the naira against the dollar. 0.01%.
In the parallel market, the naira appreciated 0.23 percent against the dollar, at an average exchange rate of 510.80 N / $, against 512.00 N / $ recorded the previous week.