Nigeria central bank introduces $1bn new FX contract on FMDQ as matured contracts peak $3.33bn year-to-date

The total value of foreign exchange matured futures contracts on the FMDQ OTC exchange has reached $3.33 billion, year-to-date, according to the September newsletter of  FMDQ, released at the weekend. This is just as the Central Bank of Nigeria has introduced a new contract to replace the matured contracts.

“Consistent with its treatment for the previous maturities (July 2016 – August 2017), the Central Bank of Nigeria introduced a new contract, NGUS SEP 28 2017, for $1.00 billion at $/₦361.41 to replace the matured contract and refreshed its quotes on the existing 1- to 11-month contracts,” the newsletter noted.

Specifically, it said the 15th OTC FX Futures contract, NGUS SEP 20 2017, with a notional amount of $383.30 million, matured and settled on Wednesday, September 20, 2017 on FMDQ, which brought the total value of matured contracts so far on the OTC Exchange year-to-date to circa $3.33 billion, and over $7.00 billion worth of OTC FX Futures contracts traded since inception.

The contract, which was valued against the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) Spot rate as published by FMDQ on September 20, 2017, had its associated clearing/settlement effected by the Nigeria Inter-Bank Settlement System PLC (NIBSS), in line with the FMDQ OTC FX Futures Market Operational Standards

It is expected that the efforts of the Central Bank of Nigeria towards resuscitating the vibrancy of the nation’s FX market will yield the desired results and invariably allow for the potential of the OTC FX Futures market to be fully maximised by businesses, investors, governments etc. with FX exposures.