CBN to resume offer rates quotation for FX futures Monday

The Central Bank of Nigeria will resume the quotation of offer rates for FX futures contracts on Monday, according to FMDQ Group, a Lagos-based securities exchange.

The CBN halted the quotation of offer rates for all FX Futures contracts a couple of weeks ago due to the reforms in the Investors’ & Exporters’ FX Market. 

There were no trades executed in the FX Futures market in the past two weeks due to the absence of offer rates for all FX Futures contracts, according to FMDQ.

“Participants have been informed that the Central Bank of Nigeria will resume the quotation of offer rates for FX Futures contracts with tenors between 13 to 60 months, effective July 3, 2023, for a one-year period, following which the CBN will only provide offer rates for 25 to 60 months FX Futures contracts,” it said on Saturday.

The total turnover in the FX spot and derivatives markets was $707.23 million this week, an increase of 1.80 percent from $694.71 million last week, according to data from the exchange.

It said the increase in total turnover was largely driven by the 917.54 percent ($55.97 million) increase in FX derivatives turnover, offsetting the 6.31 percent ($43.45 million) decrease in FX spot turnover. 

FMDQ said the increase in FX derivatives turnover was solely driven by the 917.54 percent increase in FX forwards turnover, despite the lack of activity in the market.

The total value of transactions in the FX spot market declined by 6.31 percent to $645.16 million from $688.61 million last week.

“For the week-ended June 30, 2023, the average Nigerian Autonomous Foreign Exchange Fixing rate was $/₦751.98, compared to $/₦729.98 recorded in the week-ended June 23, 2023, representing a depreciation of the naira against the United States dollar by 2.93 percent ($/₦22.00),” FMDQ said.