WEDNESDAY 29th JUNE, 2016-Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI), told the News Agency of Nigeria Tuesday 28 June 2016 that the FX Futures Market had doused the tension in the FX sector.
Yusuf said the pressure in the spot market had been drastically moderated by the inauguration, saying, “The overriding benefits of it is that it allows for better planning, reduces uncertainty and will boost investors’ confidence in the economy.
“With the Naira-Settled OTC FX Futures Market, one can now plan for an upward of four months, as far as the foreign exchange component of the investment plan is concerned.
“The OTC FX Futures Market will definitely increase the level of production in the real sector.
“It is good for the economy because it will shield investors from possible volatility in the foreign exchange market, which had previously affected businesses.’’
Also speaking, Frank Jacob, president, Manufacturers Association of Nigeria (MAN), said the naira-settled market would make foreign exchange available for manufacturers.
He said: “I believe it is good for businesses because the availability of foreign exchange for manufacturers to get certain raw materials will aid production.
“It will also reduce production costs as they can plan the purchase of FX at a price that suits them.”
It could be recalled that the FMDQ OTC Securities Exchange, in partnership with the CBN, on June 27 inaugurated the first Naira-Settled OTC FX Futures Market.
The aim of the naira-settled OTC FX Futures Market is to minimise the disequilibrium in the Spot FX market.
It is also to attract capital inflows to the country’s fixed income and equity markets and achieve naira exchange rate stability.
The OTC FX Futures rates of N/$ July (1-month) stood at N279/$1; August (2-months) rate at N277/$1; N/$ September rate is N275/$1, and October is N267/$1. The November rate is N260/$1, while December is N250/$1.
