US$1bn futures contract to be opened as Naira falls to pressure

There are high expectations that the Naira-Dollar (NGUS) December 21 2016 contract will be maturing, and  that this will be replaced with a new instrument with total value of US$1.0 billion one dealer revealed.

The Naira-settled Over The Counter (OTC) foreign exchange (FX) Futures product, whilst of tremendous benefit to Nigerian corporates according to experts, is of immense importance and advantage to the CBN, the Nigerian FX market, and the nation’s economy as a whole.

The OTC FX Futures market serves to minimise the imbalance in the Spot FX market and cause the rate to moderate; attract significant capital flows to the Nigerian fixed income and equity markets; and achieve exchange rate stability.

This is even as the Naira on Friday fell at the parallel market due to the worsening dollar scarcity  ahead of the Christmas season.

The Nigerian currency exchanged at N487 to a dollar, from N485 it had maintained for close to two weeks, while the Pound Sterling and the Euro closed at N605 and N510 respectively.

At the Bureau De Change (BDC), window, the Naira closed at N399 to a dollar, CBN controlled rate, while the Pound Sterling and the Euro traded at N606 and N515 respectively.

The Naira remained stable at the inter-bank market, trading at N305 to a dollar.

Traders said that the demand for dollars was putting pressure on the Naira.

OA

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