FX Spot Market Drops By 10.02% To $7.39bn Turnover In July – FMDQ Report

Spot FX market turnover was $7.39bn (N11.48trn) in July 2024, representing a 10.02 per cent ($0.67bn) Month-on Month (MoM) increase from the turnover recorded in June 2024 ($6.72bn).

This was contained in the FMDQ Markets Monthly Report for July 2024 seen by THE WHISTLER.

Nigeria’s foreign exchange market has encountered significant challenges, largely driven by volatility in global oil prices and the impact of domestic economic policies on liquidity.

These fluctuations have created an environment of uncertainty, complicating efforts to maintain stability in the market and posing challenges for businesses and investors alike.

The interplay between external economic factors and internal policy decisions has underscored the complexity of managing the country’s foreign exchange reserves and has had far-reaching implications for the broader economy.

The report noted that in the FX Market, the Naira depreciated against the US Dollar, with the spot exchange rate increasing by 4.88 per cent ($/N72.58) to close at an average of N1,560.32 in July 2024 from N1,487.74 recorded in June 2024.

It added further that exchange rate volatility increased in July 2024 as the Naira traded within an exchange rate range of $/N1,500.32 – $/N1,621.12 compared to $/N1,473.66 – $/N1,510.10 recorded in June 2024.

According to the report, FI market turnover in July 2024 was N6.88trn, representing a month on month decrease of 10.93 per cent (N0.84trn) from the turnover recorded in June 2024 (N7.72trn).

FMDQ noted that the decrease in turnover was driven by the 40.61 per cent (N1.85trn) decrease in OMO Bills turnover, offsetting the 52.85 per cent (N0.90trn), 24.55 per cent (N0.01trn) and 6.93 per cent (N0.10trn) increase in T .bills, Other Bonds and FGN Bonds transactions, respectively.

As a result, the trading intensity (TI) for T.bills and FGN Bonds increased MoM by 0.07bps and 0.01bps to 0.21 and to 0.06, respectively.

“T.bills with term-to-maturity (TTM) between >6M – 12M and FGN Bonds with TTM between >5Y – 10Y, were the most traded sovereign FI securities, accounting for 56.59 per cent (N2.32trn) and 20.24 per cent (N0.83trn) of the secondary market turnover for sovereign FI securities in the spot market, respectively.”

FX Spot Market Drops By 10.02% To $7.39bn Turnover In July – FMDQ Report is first published on The Whistler Newspaper