FX spot market hit $12.61bn turnover in March – Report

Alex Omenye
Alex Omenye

The March turnover in the spot foreign exchange market amounted to $12.61 billion (N19.29 trillion), reflecting a notable month-on-month increase of 47.66% ($4.07 billion) compared to February 2024 ($8.54 billion).

These figures were disclosed in the FMDQ Markets Monthly Report for March.

The report indicated a marginal depreciation of the US Dollar against the Naira in the FX market, with the spot exchange rate ($/N) declining by 0.06% ($/N0.97) to an average of $/N1,524.04 in March 2024 from $/N1,525.01 recorded in February 2024.

Exchange rate volatility also increased during this period, with the Naira trading within a range of $/N1,300.43 – $/N1,627.40 in March compared to $/N1,418.78 – $/N1,665.50 in February 2024.

Moreover, fixed income market turnover in March 2024 stood at N12.04 trillion, marking a MoM increase of 13.22% (N1.42 trillion) from February 2024 (N10.71 trillion).

This uptick was primarily driven by increased turnover across treasury bills, FGN bonds, and special bills, offsetting declines in open market operations bills and other bond transactions.

In the money market segment, total turnover rose by 18.77% (N1.88 trillion) to N11.87 trillion in March 2024.

This increase was driven solely by a surge in Repos/Buy-backs, compensating for a decrease in unsecured placement/takings transactions.

Additionally, the average overnight rate and secured lending rate (OPR rate) increased by 8.17 and 8.27 percentage points, respectively, closing at averages of 29.30% and 28.46% in March 2024.

“The average O/N rate and OPR rate (secured lending rate) increased MoM by 8.17ppts and 8.27ppts respectively, to close at an average of 29.30% and 28.46% in March 2024,” the report said.

Contrarily, total turnover in the FX derivatives market segment decreased by 18.98% ($0.87 billion) to $3.70 billion (₦5.66 trillion) in March 2024 compared to February 2024 figures.

This decline was attributed to a decrease in FX swaps transactions, despite an increase in FX forwards turnover and no activity in the FX futures market.

Furthermore, total spot market turnover for all products traded in the secondary market in March 2024 amounted to N43.20 trillion, marking a MoM increase of 29.05% (N9.73 trillion) from February 2024.

This surge was driven by increased turnover across all spot market product categories, including FX, MM, and FI transactions. Notably, the rise in MM turnover was solely due to the increase in Repos/Buy-backs, while the FI turnover saw a rise across all products except OMO Bills and other bonds, which declined during the period under review.

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