March 2024 saw a month-over-month (MoM) rise in spot foreign exchange (FX) market turnover of 47.66% ($4.07 billion) over February 2024 ($8.54 billion), to $12.61 billion (N19.29 trillion).
The FMDQ Markets Monthly Report for March, which The News Chronicles viewed, included this information.
The US dollar slightly declined vs the Naira in the foreign exchange market, according to the data. The spot exchange rate ($/N) closed at an average of $/N1,524.04 in March 2024 from $/N1,525.01 in February 2024, a decrease of 0.06% ($/N0.97).
According to the research, there was a rise in exchange rate volatility in March 2024 when the Naira fluctuated between $/N1,300.43 and $/N1,627.40, as opposed to the $/N1,418.78 and $/N1,665.50 range that was observed in February 2024.
The study states that the fixed income (FI) market turnover in March 2024 was N12.04 trillion, up 13.22% (or N1.42 trillion) from the previous month’s total of N10.71 trillion.
To counterbalance the 28.96% (N1.06 trillion) and 28.52% (N0.02 trillion) decline in open market operations (OMO) bill and other bonds transactions, FMDQ reported that the MoM uptick in the FI market turnover was driven by the 33.36% (N1.40 trillion), 45.45% (N0.86 trillion), and 17.76% (N0.15 trillion) increase in turnover across treasury bills, FGN bonds, and special bills.
“As a result, the trading intensity (TI) for FGN Bonds and T.Bills increased MoM by 0.04bps and 0.03bps to 0.12 and 0.60, respectively.”
“Bills with term-to-maturity (TTM) between >6M – 12M and FGN Bonds with TTM between >5Y – 10Y, were the most traded sovereign FI securities, accounting for 56.87% (N4.76 trillion) and 12.90% (N1.08 trillion) of the secondary market turnover for sovereign FI securities in the spot market, respectively.”
“In March 2024, the sovereign yield curve experienced an increase in level and a corresponding 3.01ppts MoM increase in yield spread1 to 4.43ppts, indicating a flattening and potential inversion of the yield curve.”
According to the statement, “In March 2024, real (inflation-adjusted) yields remained negative across the yield curve, declining further on the back of surging inflation that continues to outpace the increase in nominal yields and remains higher than policy interest rates.”
