Foreign Exchange (FX) Market Analysis for Week-Ended June 18, 2021

Forex
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Monday, June 21, 2021 07:00 AM / by FMDQ/ Header Image Credit: Tech Economy NG


Below is the commentary on the Foreign Exchange (FX) market with data for the week-ended June 18, 2021. The table following the commentary compares Spot FX weekly turnover for trades between banks (FMDQ Dealing Member (Banks) [DMBs]/Authorised Dealers) and their clients for the week ended June 11 & June 18, 2021.

 

  • In the FX Spot, Forwards and Futures markets, the total turnover for the week-ended June 18, 2021, was $583.88 million, representing a decrease of 15.22% ($104.84 million) from $688.72 million reported for the week-ended June 11, 2021. The week-on-week (WoW) decrease in turnover was driven largely by the 9.03% ($48.55 million) decrease in the FX Spot turnover. (See Table 1 below)
  • The WoW drop in FX Derivatives turnover was driven by the decline of 68.26% ($39.12 million) in FX Futures turnover, resulting in a 5.70 percentage points reduction in FX Derivatives' contribution to total FX market turnover from 21.92% recorded in the previous week to 16.22%
  • In the Investors' & Exporters' (I&E) FX market, the total value of transactions for the week-ended June 18, 2021, was $489.19 million, representing a decrease of 9.03% ($48.55 million) from $537.74 million traded in the week-ended June 11, 2021

 Table 1: Weekly FX Turnover Analysis

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  • For the week-ended June 18, 2021, the weekly average Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate was $/N410.33 compared to $/N410.25 recorded in the previous week-ended June 11, 2021, representing a depreciation of the Naira against the United States (US) Dollar by $/N0.08
  • In the parallel market, the Naira appreciated against the US Dollar by $/N2.55 to close the week-ended June 18, 2021, at an average rate of $/N496.25, representing a 0.51% appreciation when compared to $/N498.80 recorded in the previous week. Consequently, the spread between the weekly average parallel market and NAFEX rate decreased WoW by 2.97% ($/N2.63) to $/N85.92 in the week-ended June 18, 2021, from $/N88.55 recorded in the previous week. (See Table 2 below)

Table 2: Weekly FX Rate Analysis

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  • In the FX Futures market, $18.19 million worth of FX Futures contracts were traded in seven (7) deals, representing a WoW decrease of 68.26% ($39.12 million) when compared to $57.31 million traded in nine (9) deals recorded in the week-ended June 11, 2021

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