Second OTC FX Futures Contract Matures

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2nd OTC FX Futures contract, NGUS AUG 24 2016, with notional amount $152.48mm at $/N 310, matured and settled on FMDQ. In line with the OTC FX Futures Market Framework and the FMDQ OTC FX Futures Market Operational Standards, trading on the NGUS AUG 24 2016 contract ceased on Tuesday, August 16, 2016, and was valued yesterday, August 24, 2016, by FMDQ OTC Securities Exchange (FMDQ) against the Nigerian Inter-Bank Foreign Exchange Fixing (NIFEX) Spot rate. Clearing operations and settlement for the final amounts, were effected through the Nigeria Inter-Bank Settlement System PLC (NIBSS), in its capacity as the FMDQ-designated Clearing Agent for the margining and settlement of the OTC FX Futures contracts.

The August 24, 2016 matured contract was replaced by the Central Bank of Nigeria (CBN) with a new 12-month contract, NGUS AUG 16 2017, with a notional amount on offer of $1.00bn at $/₦241. In addition, the CBN refreshed its quotes and published new rates on the existing 1-month to 11-month contracts, as shown on the FMDQ website.

Over $2.40bn worth of the OTC FX Futures contracts offered by the CBN, across all the tenors, with the profile of the contract buyers including Authorised Dealers, Foreign Portfolio Investors and importers, among others, have been traded. The significant increase in turnover clearly shows the receptiveness of the transaction counterparties and end-users to the product.

The Naira-settled OTC FX Futures product has continued to pave the way for corporates to enhance business planning whilst effectively hedging their FX risk, even as the CBN continues to position and empower stakeholders towards a vibrant FX market.

 
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