Indications have emerged that the success consistently recorded at the Nigerian Autonomous Foreign Exchange (NAFEX) window has restored investors’ confidence in the Nigerian economy, its foreign exchange management and policies, following the $2.402 billion traded in just two week on the Importer $ Exporter FX segment.
For instance, in the just concluded week alone, the autonomous forex window declared a whopping $1.492bn turnover, with Monday closing figure of $340.07 million, dropped a bit the following day to $299.94 million, Wednesday $238.98m, Thursday, 238.98 million before recording $363.63m on Friday, which represented the highest turnover during the week.
In the previous week, The Daily Times findings showed that the Importer $ Exporter FX widow recorded a turnover of $909.59 million, totaling $2.402 billion transactions in two weeks.
Therefore, financial experts and forex dealers believed that the newly introduced NAFEX widow has reversed the zero level confidence of investors to highest level of confidence in the Nigerian economy.
However, the breakdown of the daily turnover showed that the window on Monday recorded a whopping 363.63 million turnover in just one day transaction against 131.84 million traded the previous Monday but declared a weaker figure of $238.98 million on Tuesday.
It however, moved up on Wednesday to $250.29 million, even though it opened mid week trading at 359.72 stronger than 359.89 to the dollar on Tuesday, and also stronger at 360.05 compared to 360.31 a day before and Monday 360.39.
On Thursday, the NAFEX window declared a total daily turnover of $299.94 million stronger than $250.29 million sold on Wednesday, and opened for trading at 359.66 per dollar against Wednesday’s 359.72. It then, closed at 360.00 compared to 360.05 traded the previous day.
But activities in the I&E FX window on Friday, strengthened when it closed the official trading at 360.40, which had earlier opened for trading at 359.45 per dollar to close the last trading day before market closed for the independent holiday with a daily total transactions of $340.07 million.
The daily Times checks, however, revealed that the autonomous window in the week before had opened with on a positive of $131.84m turnover on Monday, but surprisingly dropped to $125m on Tuesday, declaring traded volume of $256.84m in just two days.
Our further checks, also, showed that the Nigerian local currency, had recorded 0.04 per cent gain at the autonomous forex window, after opening trading activities a week ago at 359.66 per dollar, and 359.9 on Tuesday, respectively, but closed at 360.36, 359.06 last Monday and Tuesday.
However, as at last Wednesday, the turnover at the NAFEX had increased to $359.59m with addition of the mid week daily traded volume of $102.59, even though it was opened for trading at N359.71 to the dollar, but closed at 360.22 per the Greenback.
Therefore, President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, had told our correspondent that the newly introduced NAFEX rate fixing for foreign investors and exporters window would make naira sovereign and stronger in the market.
According to him, Gwadabe, noted that the newly market derivatives will enhance a transparent, accountable and secured naira determination.
He said,“The new policy would enable the Central Bank of Nigeria (CBN) to generate huge inflows running to billions of dollars to defend the local currency. The window will outwit and rattle all strata’s of operations of unofficial foreign exchange market.
“The window will see a robust and stable planning foreign exchange demand decisions of businesses. It will also counter volumes of fx transactions in the so-called shallow parallel market.”
Also, Managing Director, Afrinvest West Africa Limited, Ike Chiokesaid the jump in foreign inflows was not a surprise given the development in the FX market, particularly the launch of the I&E FX window in April.
“The largest volume of foreign inflows was recorded in May, underlining the positive impact of forex market transparency and flexibility on investor confidence. The knock-on effects of strong portfolio flows are already evident in performance of the domestic equities market which has historically been driven by foreign portfolio investors,” he said.
Stories by Motolani Oseni