Weekly FX Market Analysis for Week-Ended July 9, 2021




© FAR

Please see below commentary on the Foreign Exchange (FX) market with data for the week-ended July 9, 2021. The table following the commentary compares Spot FX weekly turnover for trades between banks (FMDQ Dealing Member (Banks) [DMBs]/Authorised Dealers) and their clients for the week ended July 2 & July 9, 2021.

In the FX Spot, Forwards and Futures markets, the total turnover for the week-ended July 9, 2021, was $663.04 million, representing a decrease of 13.60% ($104.40 million) from $767.44 million reported for the week-ended July 2, 2021. The week-on-week (WoW) decrease in turnover was jointly driven by the 11.97% ($70.44 million) and 18.98% ($33.96 million) decrease in the FX Spot and FX Derivatives turnover, respectively. (See Table 1 below)

The WoW decrease in FX Derivatives turnover was jointly driven by the 6.62% ($5.86 million) and 31.09% ($28.09 million) decrease in FX Forwards and FX Futures turnover respectively, resulting in a

1.45 percentage points decrease in FX Derivatives’ contribution to total FX market turnover to 21.86%, from 23.31% recorded in the previous week

§ In the Investors’ & Exporters’ (I&E) FX market, the total value of transactions for the week-ended July 9, 2021, was $518.10 million, representing a decrease of 11.97% ($70.44 million) from the value of transactions executed in the week-ended July 2, 2021 ($588.54 million)

Table 1: Weekly FX Turnover Analysis

 

Week-ended July 9, 2021

Week-ended July 2, 2021

WoW

% Change

Weekly

Daily Average

Percentage (%) Share

Weekly

Daily Average

Percentage (%) Share

($’million)

($’million)

FX Spot

518.10

103.62

78.14

588.54

117.71

76.69

(11.97)

Forwards

82.68

16.54

12.47

88.55

17.71

11.54

(6.62)

Futures

62.26

12.45

9.38

90.35

18.07

11.77

(31.09)

FX Derivatives

144.94

28.99

21.86

178.90

35.78

23.31

(18.98)

Total

663.04

132.61

100.00

767.44

153.49

100.00

(13.60)

For the week-ended July 9, 2021, the average Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate was $/?411.28, compared to $/?410.74 recorded in the previous week-ended July 2, 2021, representing a depreciation of the Naira against the United States (US) Dollar by 0.13% ($/?0.54)

In the parallel market, the average exchange rate remained unchanged at $/?500.00 for the week- ended July 9, 2021. Consequently, the spread between the average parallel market exchange rate and NAFEX rate decreased WoW by 0.60% ($/?0.54) to $/?88.72 in the week-ended July 9, 2021, from

$/?89.26 recorded in the previous week. (See Table 2 below)

Table 2: Weekly FX Rate Analysis

 

July 5

July 6

July 7

July 8

July 9

Weekly Average (July 9,

2021)

Weekly Average (July 2,

2021)

WoW

%

Change

NAFEX ($/?)

411.25

411.17

411.42

411.29

411.29

411.28

410.74

0.13

Parallel market ($/?)

500.00

500.00

500.00

500.00

500.00

500.00

500.00

0.00

 

In the FX Futures market, $62.26 million worth of FX Futures contracts were traded in six (6) deals, representing a WoW decrease of 0.31% ($28.09 million) when compared to $90.35 million traded in thirteen (13) deals recorded in the week-ended July 2, 2021