NAFEX declares $1.7bn as Naira rebounds at unofficial FX market

The Nigerian Autonomous Foreign Exchange (NAFEX) window has lifted liquidity in the Nigerian foreign exchange market, with total transactions turnover of $1.688 billion in just one week, just as the Naira rebounded at the unofficial forex market, checks by The Daily Times has revealed.

Although, the autonomous FX window turnover of $1.688 was lower than $1.892 bn traded in the previous week.

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 $334.32 million against $292.15m 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 $125.08m, which was lesser to $263.57m recorded on Wednesday of the prior week.
The total transactions turnover on Thursday, moved up to $321.21 million better than $306.70m declared preceding Thursday before closing the last trading day of the week under review at $251.77m 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.

However, The Daily Times checks showed that the NAFEX window as at close of the year 2017 recorded a whopping total transactions turnover of $25.65bn in just nine months of operations in 2017.

In fact, data obtained by our correspondent from FMDQ OTC securities Exchange revealed that $0.61 bn or N1865.66bn total turnover was traded in April and increased by 114 per cent to $1.32 billion or N403.92bn in May.

Total turnover on the I & E FX window in June and July were $1.63bn or N498.78bn, and $1.86bn or N569.16 bn, respectively.

Data from FMDQ OTC stated that total turnover gained momentum in August 2017, as newly created window reached $3 billion per month.

According to the data, I & E FX window in August was estimated at $3.54bn or N1.08 trn, while in September, total trade on the I & E FX window closed at $4.61 bn or N1.41trn.

Meanwhile, local currency over the weekend , closed at a better rate of N363 to the US Dollar against N364 sold on Thursday at the parallel market.

The Naira, also, appreciated against the Pound Sterling at N506 compared to N510 during the week and N447 exchanged per Euro, which is slightly better than N448, at the unofficial forex market.

At the official interbank market, the Naira, on Friday sustained slightly depreciated rate of N360.75, the same rate stood on Thursday but lower than N305.70 sold on Wednesday at the official foreign exchange market.

At the Investors and Exporters (I&E) FX window, the Naira as of Friday trading activities began trading on positive note with opening rate of N360.05 to the dollar against N360.17 stood on Wednesday, however, traded high at N362. 00 before closing weak at N360.57 compared to N360 to the dollar sold the previous day, N359.91 recorded on Tuesday, and N360.37 exchanged on Monday.
The Investors’ FX window, at the end of yesterday trading activities declared an improved total transactions turnover of $321.21m, better than $125.08 m, but lower than $334.32 sold on Tuesday and $655.62 declared on first trading day of the week.

But forex traders are optimistic that the local currency, that is likely to remain stable against the dollar next week , as demand weakens whenever the unit trades below N360 per dollar, traders said.

Traders said most forex users are not willing to source dollars weaker than 360 at the investors’ window and that offshore investors have been buying local debt in search of yields, boosting liquidity on the currency market.

Meanwhile, the Central Bank of Nigeria raised N252.88bn ($827m) at the Treasury bill auction on Wednesday as investors piled demand into the higher yielding one-year debt.

The CBN sold N177.22 bn of one-year debt at a rate of 13.7 per cent. It auctioned N6.09bn of three-month debt at 12 per cent, and N69.57bn of six-month maturity debt at 13.65 per cent. Total subscription stood at N355.2bn.

Traders said some offshore funds participated at the auction, helping boost dollar liquidity on the currency window for investors to keep naira rates stable.