Spot FX market turnover was $4.66 billion (N3.66 trillion) in October 2023, a 14.96% ($0.82 billion) decline from the turnover recorded in September 2023 ($5.48 billion).
According to the research, the US Dollar rose against the Naira in the FX Market, with the spot exchange rate ($/N) growing by 5.34% ($/N40.41) to close at an average of $/N797.43 in October 2023, up from $/N757.02 in September 2023. Furthermore, exchange rate volatility increased in October 2023, with the Naira trading within an exchange rate range of $/N741.85 – $/N993.82 versus $/N722.39 – $/N780.00 in September 2023.
The FI market turnover was N11.91 trillion in October 2023, a 29.04% (N2.68 trillion) rise from the turnover reported in September 2023 (N9.23 trillion). FMDQ reported that the MoM increase in FI market turnover was driven by 5.10% (N0.15 trillion), 170.76% (N2.92 trillion), and 24.06% (N0.01 trillion) increases in turnover across OMO Bills, CBN Special Bills, and Other Bonds, respectively, offsetting the 12.28% (N0.28 trillion) and 5.68% (N0.13 trillion) MoM declines in T. Bills and FGN Bonds transactions.
As a result, the trading intensity (TI) for T. Bills and FGN Bonds fell by 0.06 and 0.01 points, respectively, to 0.42 and 0.11.
In October 2023, the yield differential between 3M and 30Y sovereign FI securities fell by 3.13 percentage points to 8.01 percentage points, reflecting a flattening of the sovereign yield curve.
Total turnover in the Money Market (MM) category declined by 38.24% (N3.04 trillion) year on year to N4.91 trillion in October 2023, according to the report. The MoM decline was driven by a 36.03% (N2.72 trillion) decrease in Repos/Buy-backs and an 80.00% (N0.32 trillion) decrease in Unsecured Placement/Takings transactions, according to FMDQ.
Total turnover in the FX derivatives market segment was $1.55 billion (N1.22 trillion) in October 2023, a 39.27% ($1.00 billion) decline from September 2023 numbers.
According to the Exchange, the MoM decline in FX derivatives turnover was driven by a decrease in transactions across FX Swaps, FX Forwards, and FX Futures of 40.19% ($0.86 billion), 28.00% ($0.07 billion), and 52.94% ($0.09 billion), respectively.
The near-month contract (NGUS OCT 25, 2023) expired and open positions with a total notional value (NV) of $0.74 billion were settled in the Cleared Naira-Settled Non-Deliverable Forwards market.
