How NAFEX boosted fx market, foreign reserves with $31.7bn

.Records $6.1bn in January, highest in 10 months

As the nation’s foreign reserves continues to grow with improved confidence in the Nigerian foreign exchange market and its management, the Nigerian Autonomous Foreign Exchange (NAFEX) window, has contributed to this development with not less than $31.66 billion in the last 10 months of its creation, checks by The Daily Times revealed.

The Central Bank of Nigeria (CBN) opened the NAFEX, otherwise known as Investors and Exporters FX (I&E) window last year April, and has been contributing to the confidence in the Nigerian economy, foreign exchange management and policies.

It is worthy of note that I&E FX window, recorded highest transactions turnover $6.1billion in the first month of 2018.

But considering its contribution in the first month of it creation April 2017, data obtained from the from FMDQ OTC Securities Exchange showed that $0.61 billion transactions turnover was recorded in April, but increased significantly by 114 per cent to $1.32bn in May.

The Daily Times further checks revealed that the figure declared in June moved up to $1.63 bn and increased further in July to $1.86 bn and $3.54 bn in August 2017.

The I&E FX window, however, traded second highest turnover of $4.61 bn in September since establishment, but depreciated to $4.30bn in October.

In November, the autonomous forex window, declared total transactions worth of $4.51bn, while the year 2017 closed with traded turnover of $3.27 bn.

On the other hand, the NAFEX in January 2018, recorded total traded turnover of $6.1bn, the highest transactions ever recorded since the autonomous forex window was opened in 2017.

Just last week, the new window lifted liquidity in the Nigerian foreign exchange market, with total transactions turnover of $1.688bn. Although, the autonomous FX window turnover of $1.688 was lower than $1.892 bn traded in the previous week,

But the Investors window on the first trading day of the week under review, exchanged total transactions worth $655.72 million, the same figure sold on the corresponding day in the previous week.

At the close of Tuesday trading activities, the NAFEX, recorded an improved turnover of $334.32m against $292.15 m exchanged on Tuesday of the previous week, but was weaker the following day at $125.08, which was lower than $273.74 the corresponding day of the preceding week.

The NAFEX, otherwise known as Investors and Exporters (I&E) FX window, rebounded at mid week to close with turnover of $125.08 million, which was lesser to $263.57m recorded on Wednesday of the prior week.

The total transactions turnover on Thursday, moved up to $321.21m better than $306.70m declared preceding Thursday before closing the last trading day of the week under review at $251.77 m against previous Friday’s $655.72m.

The Investors’ confidence has continued to contribute to growth of the Nigerian foreign exchange market, since its creation in April 2017, while boosting investors’ confidence in the nation’s foreign exchange stability.

The Governor, CBN, Mr. Godwin Emefiele at the last Monetary Policy Meeting said, the committee members viewed with satisfaction, the growing patronage at the I&E window of the foreign exchange market and attributed the development to increased confidence by foreign investors and the preference of Nigerian investors’ and exporters’ for the window compared with all other windows.
Also, the CBN spokes person, Mr. Isaac Okoroafor, explained that the CBN would continue to ensure liquidity in the interbank sector of the market as well as sustain its interventions in order to drive economic growth and guarantee market stability.

He expressed optimism that the Nigerian economy stood to gain massively from the bank’s forex management strategy as could be seen in the accretion to the foreign reserves, which now stands at over $40 bn.