Turnover in the Fixed Income and Currency (FIC) markets for the month ended October 30, 2020 was N16.17 trillion, representing a month on month (MoM) increase of 14.93 per cent (N2.10 trillion) on September 2020 figures (N14.07 trillion), and a year on Year (YoY) decrease of 2.77 per cent (N0.46 trillion) on October 2019 figures (N16.63 trillion).
The YTD turnover as at October 30, 2020, was N180.49 trillion, representing a YoY decrease of 7.27 per cent (N14.14 trillion) on the YTD turnover of N194.63 trillion recorded as at October 31, 2019. OMO bills and Foreign Exchange transactions remained the highest contributors to the FIC markets in October 2020, jointly accounting for 59.98 per cent of the total FIC market turnover.
Total FX market turnover in October 2020 was $12.40 billion (N4.78 trillion), representing a MoM increase of 43.19 per cent ($3.74 billion) from the turnover recorded in September 2020 $8.66 billion (N3.34 trillion).
The increase in FX market turnover was majorly driven by the Central Bank of Nigeria’s (CBN) intervention sales to Dealing Member (Banks) to reduce the backlog of unfulfilled FX demand. Analysis of FX market turnover indicates that FX Derivatives turnover increased MoM by 56.89 per cent ($2.85 billion) whilst FX Spot turnover increased by 24.38 per cent ($0.89 billion) in October 2020.
In the OTC FX Futures market, the near month contract5 (NGUS OCT 28 2020) with a total outstanding notional value (NV) of $1.48 billion matured and was settled, whilst a new long-term (60-month or 60M) contract, NGUS OCT 29 2025 was introduced at a rate of $/N589.03, representing $/N0.06 MoM appreciation in the futures price of the Naira when compared to the offer rate ($/N589.09) of the previous 60M contract (NGUS SEP 30 2020).
The total NV of open OTC FX Futures contracts as at October 30, 2020 stood at $9.89 bIillion, representing a decrease of 11.14 per cent ($1.24 billion) on the NV of open contracts as at September 30, 2020 ($11.13 billion), and continuing its downward trend since May 2020.
The CBN Official Spot $/N exchange rate closed at an average of $/N379.05 in October 2020, representing a $/N0.01 depreciation of the exchange rate from $/N379.04 recorded in September 2020.
Conversely, the Naira appreciated against the US Dollar at the Investors’ and Exporters’ (I&E) FX Window, gaining 0.03 per cent ($/N0.12) to close at an average of $/N385.90 in October 2020 from $/N386.01 recorded in September 2020. In the parallel market, the Naira depreciated against the US dollar losing 1.03 per cent ($/N4.71) to close at an average of $/N461.45 in October 2020 from $/N456.74 recorded in September 2020, widening the average spread between the exchange rates in the formal (I&E FX Window) and irregulated (parallel) FX markets by 6.81 per cent to $/N75.55 in October 2020, from $/N70.73 in September 2020 Fixed Income (FI) Market.
In the primary markets, average discount rates for the 91-day, 182-day and 364-day T.bills decreased MoM by 42 – 148 basis points (bps), to a range of 0.67per cent – 1.49 per cent in October 2020, while the discount rates for CBN OMO bills decreased MoM by an average of 97bps to close at a range of 3.77 per cent – 7.98 per cent in October 2020. Similarly, the marginal coupon rates for FGN Bonds decreased by an average of 323bps to close at a range of 4.97 per cent – 6.00 ntper c in October 2020 for the re-opening of the 15Y and 25Y bonds.