by PATRICK ATUANYA
Central Bank of Nigeria (CBN) continued its supply of US dollars in the FX markets, selling a total of $292.57 million through several interventions conducted for the week-ending April 28, 2017.
The apex bank maintained its marginal rate for the Secondary Market Intervention Sales (SMIS) – Wholesale Forwards at $/N320.00, Small and Medium Enterprises (SMEs) and Invisibles at $/N357.00.
Following the circular dated April 21, 2017, in which the CBN announced the establishment of a special FX window – the “Investors’ & Exporters’ FX Window” which sets out a single and autonomous FX market structure, the FMDQ OTC Securities Exchange last week published the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX).
The NAFEX, which is a polled rate derived from FX rates submission, from a selection of Authorised Dealers participating in the I&E FX window, was, for the first time, calculated as $/N375.33 on Monday, April 24, 2017 and closed at $/N379.04 on Friday, April 28.
The I&E FX Window caters mainly for Invisible transactions (excluding International Airline Ticket Sales’ Remittances), Bills for Collection and other trade-related payment obligations (at the instance of the customer) and has Exporters, Foreign Portfolio Investors (FPIs), Foreign Direct Investors (FDIs), Authorised Dealers (banks) and other party with autonomous sources of foreign currency, sell US dollars to willing buyers at mutually agreed rates.
The exchange rate in the Bureau de Change (BDC) market rose by $/N3.00 to close at $/N391.00, indicating an increase of 0.77 percent when compared to $/N388.00 reported at the end of the previous week-ending April 21, 2017
In the inter-bank market, the official exchange rate fell marginally by $/N0.15 to close at $/N305.85, indicating a 0.05 percent decrease when compared to $/N306.00 reported at the end of the previous week-ending April 21, 201.
Therefore, the spread between the inter-bank and BDC market exchange rates rose by $/N3.15 to $/N85.15, representing an increase of 3.84 percent from the spread of $/N82.00 recorded the previous week-ending April 21, 2017
In the OTC FX Futures market, the 10th Naira-settled OTC FX Futures Contract NGUS APR 25, 2018 with a notional amount of $965.29 million, matured and settled on FMDQ within the week under review.
The CBN replaced this with a new 12-month contract, NGUS APR 25 2018 with notional amount on offer $1.00bn at $/N387.33, and repriced their quotes on all existing OTC FX Futures contracts to reflect the activities in the I&E FX window
Still within this market, contracts worth $220.60 million traded in two deals, as compared to the previous week’s total of $20.50 million traded in three deals.
For the week-ended April 21, 2017, trading activity in the Spot FX market between the banks and their clients stood at $411.36m (average daily turnover of $102.84mm), representing a 3.73 percent decrease from the $427.32mm (average daily turnover of $106.83m), recorded in the previous week.
Activity in the Spot FX market amongst banks for the same trading week revealed a 51.34 percent increase, as a total turnover of $70.36m (average daily turnover of $17.59m) was recorded against the $46.49m (average daily turnover of $11.62m) reported the previous week.