Forex transactions at Investors & Exporters’ window drops

Forex transactions at Investors & Exporters’ window drops

Last week at the Investors’ & Exporters window, foreign exchange transactions declined by 17.2 per cent, according to FMDQ Securities Exchange Limited. The total value of transactions stood at $489.85m from $590.34m the previous week.

The I&E window was created in April 2017 by the Central Bank of Nigeria in an attempt to raise liquidity in the forex market following a dearth of forex and ensure timely execution and settlement for eligible transactions.

According to the Securities Exchange, the total turnover in the forex spot and derivatives markets was $677.44m, representing a decrease of 24.93 percent ($225.01m) from $902.45m reported for the previous week.

It said the week-on-week decrease in turnover was jointly driven by the 17.02 percent ($100.49m) and 39.89 percent ($124.51m) decrease in the forex spot and forex derivatives turnover, respectively.

The decrease in forex derivatives turnover was jointly driven by the 7.39 per cent ($14.98m) and 100 per cent ($109.54m) decrease in forex forwards and forex futures turnover respectively.

Forex derivatives’ contribution to total forex market turnover dropped to 27.69 percent from the 34.58 percent recorded in the previous week.

The Nigerian forex market is segmented with multiple exchange rates, and the most important rate being the I&E window, according to Financial Derivatives Company Limited.

The FDC analysts, in a report last week, said, “No less than 55 per cent to 60 per cent of Nigerian forex transactions are traded at this window. The CBN and most exporters and investors use this window.



Author: Greg