FMDQ to engage stakeholders to combating currency volatility

FMDQ Securities Exchange Limited says it has made aarrangements to host a live webinar for stakeholders in Nigeria’s financial market.

This was to enable them to discuss ‘Combating Currency Exchange Volatility through Risk Management Tools.’

According to FMDQ, the COVID-19) pandemic is making the management of volatilities, such as market, credit, foreign exchange, become “increasingly imperative for continued survival of businesses.”

In addition, FMDQ stated that the webinar would provide an opportunity for market participants, including corporate, foreign portfolio investors, foreign direct investors and other investors to improve their knowledge of derivatives products, demystify the concept of hedging their FX exposures in the financial market, and “further understand the application of the OTC FX Futures product as a crucial risk management tool in achieving this.”

FMDQ noted that managing risks and the volatilities presented by the current crisis could not be overemphasised as “they are a critical measure for business continuity at such a time as now and beyond, and businesses/individuals with interests across global markets must acknowledge, anticipate, and effectively manage these risks to enhance efficient financial planning and operations.”

In 2016, the Central Bank of Nigeria in collaboration with FMDQ, introduced the naira-settled OTC FX Futures product to minimise the disequilibrium in the spot FX market and provide a means for businesses to manage their FX exposures towards achieving exchange rate stability.

In keeping with its commitment to the stability of the foreign exchange market, the apex bank, as the pioneer seller of contracts provides quotes for contracts ranging from 1-month to 60-month contracts (that is, maturities extending up to five years), bringing the total number of open contracts in the market at any one time to 60.

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