FMDQ Commends CBN for Restoring Transparency in FX Market
The Chief Executive Officer, FMDQ Group, Mr. Bola Onadele. Koko, has hailed the Central Bank of Nigeria (CBN) for activating the on-system trading and reporting of foreign exchange (FX) transactions on the FMDQ-advised System.
The CBN in line with its desire for a more liquid market, last month, took a remarkable step in increasing transparency by activating the on-system trading and reporting of FX transactions on the FMDQ-advised System.
The move was supported by the adoption of NAFEX as the benchmark rate for the public sector foreign currency-denominated transactions.
Commenting on this development, Onadele said: “FMDQ is excited at the introduction of market-building initiatives by the CBN to ensure the further development of the FX market, in recognition that a liquid, transparent and credible FX market is a major precursor for increased inflows into the Nigerian financial market.
“FMDQ remains committed to institutionalising structures – efficient processes, systems, etc., in collaboration with market stakeholders, to support initiatives towards delivering a thriving FX market that is well-positioned to support the Nigerian economy.”
According to him, addressing the market, the CBN Governor, Mr. Godwin Emefiele, had emphasised the importance of a transparent and credible FX market, and had reiterated the CBN’s commitment to implementing market-enhancing initiatives required to inspire confidence towards sustaining and deepening the Nigerian FX market.
To this end, the FMDQ CEO said the implementation of market initiatives have seen a significant increase in the turnover recorded in the FX market, from an average monthly turnover recorded in January to April 2021 at $1.30 billion, compared to May 2021 with $2.52 billion turnover recorded, whilst the number of executed trades rose from an average monthly number of 6,733 trades in January to April, to 6,949 trades in May.
“The renewed confidence and depth in the FX market will improve the attractiveness of the Nigerian market to foreign portfolio investors and also pave the way for the introduction of new derivatives products on FMDQ’s platform to support hedging of risk exposures by both local and foreign market stakeholders,” he said.
According to him, as Africa’s first vertically integrated financial market infrastructure (FMI) group and a one-stop platform to commence and end all financial market transactions in a seamless, timely and cost-efficient manner, FMDQ Group remains positioned to collaboratively work with market stakeholders in developing the Nigerian markets through innovative and value-adding solutions.
“With its renewed aspiration as encapsulated in its mission to ‘collaborate to empower markets for economic progress towards delivering prosperity’, FMDQ Group, having consolidated its activities into a fully diversified platform across multiple asset classes is strategically positioned to support the transformation of the Nigerian financial market to become globally competitive, operationally excellent, liquid, and diverse,” he said.
SOURCE: THIS DAY