Twofold Rise in FX Market Turnover Fails to Lift Naira

The turnover in the official foreign exchange market more than doubled this week, reflecting increased dollar supply, but the naira weakened further against the greenback.

Data from FMDQ Securities Exchange showed the total turnover in the FX spot and derivatives markets jumped by 109.52 percent to $683.97 million from $326.44 million last week.

The average Nigerian Autonomous Foreign Exchange Fixing rate closed at ₦772.92/$, compared to ₦768.66/$ last week, representing a depreciation of the naira against the dollar by 0.55 percent.

The increase in total turnover was largely driven by the trading volume in the FX spot market which surged by 109.84 percent ($357.47 million) while that of the derivatives market rose by 6.06 percent ($0.06 million).

“The WoW increase in FX derivatives turnover was solely driven by the 6.06 percent ($0.06 million) increase in FX forwards turnover, whilst there was no activity in both Exchange-Traded FX Futures and Cleared Naira-Settled Non-Deliverable Forwards (formally known as the Naira-Settled OTC FX Futures) markets,” FMDQ said.

The total value of transactions in the FX spot market increased to $682.92 million from $325.45 million last week.

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