By KAYODE TOKEDE, Lagos
Investors at the Investors & Exporters Foreign Exchange (I&E Fx) window have traded a turnover of $3.2 billion on the FMDQ OTC Exchange within 15 days of active trading this month, LEADERSHIP can report.
The I&E FX was created by the Central Bank of Nigeria (CBN) to boost supply of foreign exchange into the nation’s economy, attract more investments and stabilise the foreign exchange market.
CBN introduced the special window for investors, exporters and end-users of foreign exchange on April 21, 2017 as part of its efforts to deepen the FX market and accommodate all the foreign exchange obligations.
Investigation by LEADERSHIP showed that trading on the specialised window for investors and exporters in December recorded one of the highest transactions last week, attributable to holiday demands.
Finance analysts said the absence of CBN’s weekly intervention was also a thrust in trading on the specialised window, though the foreign exchange market remains relatively stable.
Currency analyst at Ecobank Nigeria, Mr. Kunle Ezun had predicted that the apex bank might not intervene in the foreign exchange after its $210 million injection on December 12.
A total turnover estimated at $1.1 trillion was traded in the first trading week of December, dropping by nearly 38 per cent to $689.6 million total turnover in the second week.
Just last week, a total turnover of about $1.4 billion was traded on the FMDQ OTC’s I&E FX window to signal surge trading by investors on the specialized window.
Specifically on December 19, a total turnover estimated at $856.45 million was traded, the highest this month while the lowest total turnover was $59.6 million on December 13, 2017.
Analysts at FSDH commend the CBN’s creation of the I&E FX window, stressing on the need for government to improve the nation’s infrastructure.
They said, “Although we commend the initiative and note the gains the Nigerian economy recorded since its implementation, we believe that the gains could be short-lived in the absence of complementary measures that will improve the competitiveness of the Nigerian economy.
“There is the need for concerted efforts to improve physical and human infrastructure in order to increase local production to meet local consumption and boost exports to generate diversified foreign exchange earnings.”
However, at the I&E window, the Naira this month has depreciated by 1.2 per cent from N360.65 to N365 against the Dollar as at the close of business last week.
In the just concluded week, the Naira appreciated week-on-week at the I&E FX window by 0.04 per cent to N360.82 against the Dollar while it closed steady against the Dollar at other market segments.
The Naira exchange rate against the Dollar closed steady at the interbank foreign exchange market segment, the Bureau De Change (BDC) and the parallel market.
At the Interbank market it closed at N330.00 against the Dollar. At the BDC and parallel market window, it closed at N361 and N365 respectively even in the absence of the weekly intervention by the CBN.
Also, the Pounds Sterling and Euro remained flat at N485 and N425 respectively.
Analysts at Cowry Assets Limited, a Lagos-based security firm predicted that the foreign exchange market might remain stable following the sustained stability in global oil prices.
According to them, “this week, we retain our favourable outlook for the exchange rate amid sustained stability in global crude oil prices which should result in further build-up in foreign reserves as well as CBN’s continued intervention to meet demand at the interbank foreign exchange market.”
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