Transactions in fixed income, currency market up 94.9%

By Nkiruka Nnorom

Turnover in the fixed income and currency (FIC) market rose to N24.03 trillion in September, 2021, representing a 94.89 percent Month-on-Month (MoM) increase compared to N11.7 trillion in August.

This also represents a 70.79 percent Year-on-Year (YoY) increase from N14.07 trillion recorded in September, 2020.

This is contained in FMDQ Exchange Limited’s Fixed Income and Currency (FIC) Market Summary for September, 2021.

Breakdown of transactions in the FIC market for the period showed that Foreign Exchange (FX) and money market transactions remained the highest drivers of turnover, jointly accounting for 54.22 percent of the total FIC markets turnover in September 2021 at N7.05 trillion and N5.98 trillion respectively.

OMO and CBN Special Bills’ contribution to FIC Market turnover stood at N5.76 trillion, representing 23.96 percent of the total FIC market turnover for the period.

Treasury Bills (TBs) accounted for N2.87 trillion or 11.95 percent of the total market turnover, while FGN bonds and other bonds accounted for N2.37 trillion, representing 9.86 percent of the total FIC market turnover.

Further breakdown showed that total FX market turnover in September 2021 at N7.05 trillion, was 87.08 percent increase from the turnover recorded in August 2021.

According to FMDQ, the MoM increase in total FX market turnover was jointly driven by the 68.61 percent and 108.02 percent MoM increase in FX Spot and FX Derivatives turnover respectively in September 2021.

In the FX market, the Naira depreciated against the US Dollar, losing 0.31 percent ($/N1.26) to close at an average of $/N412.75 in September 2021 from $/N411.49 recorded in August 2021.

OMO bills was the highest contributor to FI market turnover, driven by the MoM increase in its turnover by 418.92 percent (N3.10trn) and resulting in an increase in OMO bills trading intensity by 134bps to 1.63 from 0.29 in August 2021. “This may be attributed to the increase in OMO bills issued by the Central Bank of Nigeria (CBN) in the primary market,” FMDQ said.

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