New Telegraph

FMDQ reports N10.24trn turnover in May

Turnover in the FIC markets for the month ended March 31, 2021, was N19.55 trillion, representing a month-onmonth (MoM) increase of 10.20 per cent (N1.81 trillon) and a year on year (YoY) decrease of 32.54 per cent (N9.43 trillion). Turnover in the FIC markets for the month ended May 31, 2021, was N10.24 trillion, representing a month-onmonth (MoM) and year-onyear (YoY) decrease of 36.71 per cent (N5.94 trillion) and 13.07 per cent (N1.54 trillion) respectively. Foreign exchange (FX) and money market transactions were the highest contributors to the FIC markets turnover in May, 2021, jointly accounting for 63.13 per cent of the total FIC markets turnover.

Total FX market turnover in May 2021 was $7.31 billion (N3.63 trillion), representing a MoM decrease of 41.24 per cent ($5.13 billion) from the turnover recorded in April 2021 ($12.44 billion). The MoM decrease in total FX market turnover was driven by the corresponding decline in both FX Spot and FX Derivatives turnover by 14.87 per cent ($0.73 billion) and 58.43 per cent ($4.40 billion), respectively in May 2021.

The MoM decrease in FX Derivatives turnover was driven by the MoM decrease in turnover across all derivative products, evidenced by the MoM decline in FX Swaps, FX Forwards, FX Futures and Other Derivatives turnover by 70.79 per cent ($2.52 billion), 17.09 per cent ($0.27 billion), 71.33 per cent ($1.07 billion and 60.67 per cent ($0.54 billion) respectively. In the OTC FX Futures market, the near month contract3 (NGUS MAY 26, 2021) with a total outstanding notional value (NV) of $1.00 billion matured and was settled, whilst a new long-term (60M ) contract, NGUS MAY 27, 2026 was introduced at a Futures price of $/N613.76.

The total NV of open OTC FX Futures contracts as at May 31, 2021 stood at circa (c.) $3.96 billion representing a MoM and Year to-Date (YTD) decrease of 14.47 per cent ($0.67 billion) and 29.77 per cent ($4.15 billion) respectively from its value as at April 30, 2021 and January 4, 2021, continuing its downward trend since May 2020. In May 2021, the Central Bank of Nigeria (CBN) ceased the publication of its Official Spot $/N exchange rate of $/ N379.00 on its website, replacing it with a market-driven rate reflective of the transactions in the Investors’ and Exporters’ (I&E) FX Window. At the I&E FX Window, naira depreciated against U.S. Dollar, losing 0.22 per cent ($/N0.91) to close at an average of $/N411.27 in May 2021 from $/N410.36 recorded in April 2021, and trading within a range of $/N360.00 and $/N437.41 in May 2021. Similarly, the naira depreciated against the U.S. dollar in the parallel market, losing 0.42 per cent ($/N2.03) to close at an average of $/N486.28 in May 2021 from $/N484.25 recorded in April 2021.

Consequently, the average spread between the exchange rates in the formal (I&E FX Window) and unregulated (parallel) FX markets increased by $/N1.12 to $/N75.01 in May 2021. In the primary markets, average discount rates for the 91- day, 182-day and 364-day T.bills increased MoM by an average of 0.27 percentage points (ppts), to close at a range of 2.50 per cent – 9.70 per cent in May 2021 and continuing its upward trend since December 2020.

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