Nigeria’s financial markets witnessed heightened activity in October 2024, as the total spot market turnover surged by 9.4 per cent to reach N36.75trn.
This represents N3.16trn increase compared to September’s N33.59trn, reflecting significant growth across the foreign exchange (FX), money market (MM), and fixed income (FI) segments.
The data, released in the FMDQ Markets Monthly Report for October 2024 and obtained by NewsNGR, highlights the resilience of Nigeria’s financial markets despite the ongoing volatility in the foreign exchange market.
According to the FMDQ report, the FX turnover rose by 8.49 per cent (N1.28tn), the money market (MM) turnover by 10.76 per cent (N1.01tn), and the Fixed Income (FI) turnover by 9.50 per cent (N0.87tn).
Notably, the increase in MM turnover was driven by heightened activity in the Buy-backs category. Similarly, the rise in FI turnover was fueled by strong demand for Treasury Bills (T-bills), Open Market Operation (OMO) bills, and Federal Government of Nigeria (FGN) Bonds.
However, turnover in the Other Bonds category saw a decline, while CBN Special Bills remained inactive during the review period.
The spot FX market recorded a turnover of $10.08bn (N16.36tn) in October, reflecting a 6.58 per cent month-on-month (MoM) increase from September’s $9.46bn.
This period also saw the Naira depreciate against the US Dollar, with the average spot exchange rate sliding by 2.38 per cent to $/N1,631.71 from $/N1,592.89 in September.
Exchange rate volatility persisted, with the Naira trading within a broader range of $/N1,552.92 to $/N1,675.49 compared to September’s narrower band of $/N1,539.65 to $/N1,667.42.
This fluctuation reflects continued uncertainty in the FX market, driven by uneven dollar supply and demand mismatches.
The FI market turnover reached N10trn in October, up 9.50 per cent from N9.13trn in September. This was largely due to increased trading in T-bills, OMO bills, and FGN bonds. T-bills with term-to-maturity (TTM) of 6–12 months were the most actively traded sovereign fixed-income securities, accounting for 30.88 per cent (N1.58trn) of turnover.
Meanwhile, FGN Bonds with TTM between 5–10 years contributed 24.65 per cent (N1.26trn).
The notable growth across market segments highlights the resilience of Nigeria’s financial markets despite the ongoing challenges in the foreign exchange environment.
However, the persistent depreciation of the Naira and exchange rate volatility remain pressing concerns for policymakers and market participants.
The continued rise in market activity reflects a mixed outlook, with opportunities for investors alongside the risks associated with Nigeria’s broader macroeconomic challenges.