The Naira, at the close of trading week strengthened against the US Dollar at the Central Bank of Nigeria (CBN) spot market, Investors & Exporters Foreign Exchange (I&E) FX window and the parallel segment of the forex market, findings by The Daily Times findings has showed.
In the first two months of this year, the Investors FX window has recorded a whopping $10.1billion turnover, helping in stabilizing the foreign exchange market.
The special FX window in the just concluded month of February declared a total transactions turnover of $3.95 billion, against $6.1 billion recorded in January, representing a decline of 35 per cent.
Although, figure obtained showed that I&E FX window between April and December 2017, recorded total turnover of $25.65billion, with September and November declared the highest transactions turnover, while April, the month that the CBN created the special FX window recorded the lowest turnover figure.
However, data from FMDQ OTC securities Exchange revealed that $0.61 billion or N1865.66 bn total turnover was traded in April and increased by 114 per cent to $1.32 bn or N403.92 bn in May.
Total turnover on I&E FX window in June and July were $1.63 billion or N498.78bn and $1.86bn or N569.16bn , respectively.
Data from FMDQ OTC stated that total turnover gained momentum in August 2017, as newly created window reached $3 bn per month.
According to the data, I & E FX window in August was estimated at $3.54bn or N1.08 trillion, while in September, total trade on the I & E FX window closed at $4.61 bn or N1.41trn.
For October it dropped to $4.30 billion or N1.32 trillion, but the turnover trade on the I & E FX window in November and December were $4.51 bn or N1.38 trn and $3.27 bn or N1 trn , respectively.
The I& E FX was created by the CBN to boost supply of foreign exchange into the Nation’s economy, attract more investments and stabilize the foreign exchange market.
CBN introduced the special window for investors, exporters and end-users of foreign exchange on April 21, 2017 as part of its efforts to deepen the FX market and accommodate all the foreign exchange obligations.
The Associate Professor and Head, Banking & Finance department Nasarawa State University, Prof Uche Uwaleke, had said, “There is no question that the Investors and Exporters window introduced by the CBN sometime in April 2017 was one of the best developments in the foreign exchange market last year.
“It came at a time the market was facing liquidity crisis and foreign investors confidence was waning.
“The window helped in no small measure in boosting liquidity and access to forex by creating an autonomous channel where the exchange rate is market determined.
“So, the huge turnover recorded since the introduction of the AFEX points to the strong confidence that investors now have in the Nigerian economy. This measure, supported by the CBN’s sustained intervention, has aided the near convergence of rates across all market segments.
“The first positive sign manifested almost immediately with the parallel market rate dropping from a peak of N520 to a dollar to less than N400 few days after.
“Capital importation has been on the rise on the back of this forex window and the manufacturing sector has equally benefited going by the Purchasing Managers Index which has been above the 50 points threshold since May last year.
“In addition, the bullish nature of the stock market last year and its impressive performance owe largely to the introduction of the I & E window by the CBN. By and large, the effect on the economy has been salutary.”
However, Naira trading on the foreign exchange market was flat at N362 against the Doll in the parallel market – despite trading at N363 in four consecutive sessions of the week – while it strengthened by 0.17per cent to N360.07 in the I&E FX window, with bulk of trades remaining within the N360-N369 band.
The apex bank had injected $210 million into the foreign exchange market during the week, comprising $100 million, $55 million, and $55 million disbursements to the wholesale, SMEs, and invisibles windows, respectively.