Turnover in the Fixed Income and Currency (FIC) market operated by FMDQ Securities Exchange for the month ended July 31, 2018 amounted to N13.09 trillion as against N17.23 trillion in June.

The July turnover represented a 23.99 percent (N4.13 trillion) month-on-month (MoM) decline and a 13.53 per cent (N1.56 trillion) year-on-year (YoY) increase.

The month-on-month turnover declined largely across all segments of the FIC market, excluding the Repurchase Agreement/Buy-Backs market, which recorded a 5.22 per cent (N0.12 trillion) MoM increase in July.

In a report, the Treasury bills (T.bills) and Foreign Exchange (FX) segments remained the major drivers of turnover in the FIC market, jointly accounting for 74.26 per cent of total turnover in July, albeit a 5.09 percentage points (ppts) decline from their levels of contribution in June.

Total FX market turnover in July was $12.61 billion, a 36.31 per cent ($7.19 billion) decline from the turnover recorded in June ($19.80 billion). Turnover at the Investors & Exporters (I&E) FX Window in July was $3.39 billion, representing a 13.74 per cent ($0.54 billion) MoM decline from the value recorded in June ($3.93 billion).

Despite the MoM decline in turnover at the I&E FX Window, its contribution to total FX market turnover increased from 19.85 per cent in June to 26.88 per cent in July, bringing the total YTD3 turnover at the I&E FX Window to $33.67 billion.

Analysis of FX turnover by trade type showed a similar MoM trend to the total FX Market turnover in July, with Member-CBN trades recording the highest MoM Percentage decline of 38.11 per cent ($2.14 billion), while Member-Clients trades recorded the highest MoM decline in value of $4.06 billion from $11.21 billion in June to $7.16 billion in July.

Analysis of contribution to total FX turnover by trade type indicated Member-Client and Member-CBN trades remained the major drivers of turnover.

However, the contribution of Member-CBN trades declined marginally by 0.76ppts to 27.52 per cent, while the contribution of Inter-Member and Member-Client trades to total FX turnover increased marginally by 0.73ppts and 0.16ppts to 15.78 per cent and 56.78 per cent respectively.

In line with the MoM trend in the FX market, analysis by product type showed that turnover in FX Spot and Derivatives declined MoM by 35.01 per cent ($4.25 billion) and 41.85 per cent ($2.78 billion) respectively.

In July, the 25th Naira-settled OTC FX Futures contract (NGUS JUL 25, 2018) with a total open contract size of $405.66 million, matured and was settled on FMDQ, whilst a new 12-month open contract (NGUS JUL 24, 2019) for $1.00 billion at $/N363.58 was introduced by the CBN to replace the matured contracts.

In July, the USD/NGN rate in the parallel market appreciated by $/N2.00 to close the month at $/N360.00 (from $/N362.00 as at June 29, 2018), while the Naira depreciated at the I&E FX Window, losing $/N1.08 to close the month at $/N362.40 (from $/N361.22 as at June 29, 2018), resulting in the closing USD/NGN rate at the parallel market being N2.40 lower than the USD/NGN rate at the I&E FX Window for the first time in 2018.