Turnover in Nigeria’s fixed income, currency markets declines 12.05% in September despite FX transactions growing 10%

Transaction turnover in Nigeria’s fixed income and currency markets declined 12.05 percent month-on-month in September 2017 to ₦11.34 trillion, representing ₦1.55 trillion fall from the value recorded in August and a 1.79 percent (₦0.22trn) increase year-on-year, according to the latest FMDQ OTC monthly report seen by Businessamlive.

The report specifically indicates transactions in the FX market recorded an increase of 10.01 percent ($1.28bn) when compared with the value recorded in August ($12.76bn) to settle at $14.04 billion in September.

In the month under review, rates for the naira traded relatively flat as the Investors’ & Exporters’ (I&E) FX Window witnessed the only decline closing at ₦360.40/$ (from $/₦360.39) whilst also trading at a premium to the parallel market, which maintained a flat rate for month of September opening and closing at ₦365.00/$.

However, the CBN4 official spot rate experienced a slight appreciation, gaining ₦0.15 to close at ₦305.75/$ from ₦305.90/$ at the beginning of the month

As at end-September, the total value traded in the I&E FX Window settled at $4.60 billion for September, an increase of 30.20 percent ($1.08bn) when compared with the value recorded in August ($3.53bn).

The report equally indicates that the total value traded at the I&E FX Window since inception stands at $13.56 billion.

It also indicates that the treasury bills (T-bills) segment of the fixed income market continued its dominance in the market in the review period, accounting for 38.45 percent (41.01% in August) while FGN2 bonds recorded 9.08 percent (4.21% in August) of total turnover in the month.

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Specifically, transactions in the T.bills market accounted for 80.88 percent of the overall fixed income market, from 90.67% the previous month

On the other hand, activities in the foreign exchange (FX) market accounted for 36.49 percent (31.12% in August) while money market (repurchase agreements [Repos]/buy-backs and unsecured placements/takings) accounted for 15.92 percent (23.42% in August) of total turnover for the reporting period

Inter-member trades stood at $0.78 billion in the month of September, a 45.49 percent decrease when compared with trades recorded in August, and a 29.95 percent decrease year-on-year. Member-Client trades stood at $9.12bn in September, an increase of 6.02% ($0.52bn) from the previous month

Member-CBN trades stood at $4.13 billion in September ($2.72bn in August), representing an increase of 51.79 percent ($1.41bn) month-on-month and an increase of 145.14 percent ($2.45bn) year-on-year.

The 15th Naira-settled OTC FX Futures contract, NGUS SEPT 20, 2017, worth $383.30mm, matured and settled in September, whilst a new 12-month contract – NGUS Sept 26, 2018 – for $1.00bn, was introduced by the CBN at $/₦361.41 fixed income market (T.bills and FGN Bonds)