Investors Trade Foreign Exchange Worth N24.93trn In 5 Months

Following increased demand, investors exchanged Foreign Exchange (FX) worth N24.93 trillion in the five months to May 31, 2022, compared to N21.36 trillion moved in the same time in 2021 through the Investors & Exporters (I& E) window, representing a N3.57 trillion or 16.71 percent increase.

This is according to the FMDQ Exchange Fixed Income and Currencies (FIC) monthly report, which was made accessible to Lagos-based news outlets. FX, Treasury Bills, Open Market Operation (OMO), CBN Special Bills, FGN & Other Bonds, and money market are all part of the FMDQ markets.

The Central Bank of Nigeria (CBN) established the I&E window in 2017 to further broaden the foreign exchange market and meet all requirements in the nation.

The CBN had stressed that its purpose was to boost liquidity in the market and ensure timely execution and settlement for eligible transactions.

However, in 2021, the apex bank adopted the I&E as the official rate, stating that it would help boost investor confidence which has been lacking for some time.

According to the report, the average turnover trade by investors and exporters in the period under review is N4.99trillion as against N4.72 trillion in the prior year. 

The turnover of FX trade at its highest and lowest amounts was N7.29trillion and N4.06trillion in April and February 2022, respectively.

Comparing the highest and lowest amount of FX turnover traded in 2021, the FMDQ report disclosed N5.11 trillion in April 2021 and N5.07trillion in March 2021, respectively. 

Meanwhile, the increasing total foreign exchange turnover at the FMDQ impacted the Naira as it depreciated mostly in May 2022.

The report disclosed that Naira depreciated against the US Dollar, losing 0.38 per cent or N1 60 to close at an average of US Dollar/N419.15 in May 2022 from US Dollar/N417.55 recorded in April 2022.

The report noted, “Further, exchange rate volatility increased in May 2022 compared to April 2022 as the Naira traded within an exchange rate range of US Dollar/N417.00-421.50 in May 2022 compared to US Dollar/N416.50-419.50 recorded in April 2022.”

The report further disclosed that turnover in FMDQ Markets increased by 1.98 per cent or N1.15 trillion to N78.25 trillion in five months of 2022 from N76.74 trillion in five months of 2021.   

According to the report for May 2022, the turnover in FMDQ markets for the month ended May 2022 was N15 39 trillion, representing an MoM decrease of 20.42 per cent or N3.95 trillion and a YoY increase of 50.29 per cent or N5.15 trillion, respectively

The report stated that, OMO, CBN Special Bills and Foreign Exchange (transactions were the highest contributors to the FMDQ markets turnover in May 2022 jointly accounting for 63.03 per cent of the total FMDQ markets turnover.

For the spot market, the report disclosed that a total market turnover for all products traded in the spot market was 13.48 trillion in May 2022 representing an MoM decrease of 15.01 per cent or N2.38 trillion from the turnover recorded in April 2022


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