Citi Trades First Naira-Settled FX Futures With CBN | Independent Newspapers Limited
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Citi Trades First Naira-Settled FX Futures With CBN

cbn; interbank, external resesrves
Posted: Jun 30, 2016 at 3:20 pm   /   by   /   comments (0)

The Central Bank of Nigeria (CBN) and Citibank on Wednesday executed the country’s first naira-settled futures trade against the dollar, market regulator, FMDQ OTC Securities Exchange said, reports Reuters.

On Monday the central bank introduced an over-the-counter futures market on the currency, to help manage dollar demand, quoting the naira firmer at N279 to the dollar in a month’s time and at N210 naira by April next year.

The rate at which Wednesday’s futures deal was done and the size of the trade was not disclosed.

The apex bank had last week auctioned $3.5 billion on the futures market to clear a backlog of currency demand after it lifted its 16-month-old peg to allow the naira to trade freely on the interbank market.

It sold $697 million in one-month futures, $1.22 billion in two-month contract and $1.57 billion due in three months, in order to clear a backlog of $4.02 billion of demand.

In the non-deliverable forwards market, the naira rose against the dollar on Wednesday, with the one-month contract quoting the currency at N283, converging almost with the spot market, which traded the naira at N282 at 1217 GMT.