Lagos – Alhaji Aminu Gwadebe, President, Association of Bureau De Change Operators of Nigeria (ABCON) on Tuesday said that the Naira-Settled OTC FX Futures Market might sideline genuine importers in transactions.
Gwadebe told the News Agency of Nigeria (NAN) in Lagos that the recently launched FX Futures Market was skewed in favour of foreign investors.
NAN reports that the Central Bank of Nigeria (CBN) in conjunction with FMDQ Securities Exchange on Monday launched the new Naira-Settled OTC FX Futures Market to reduce volatility in the forex market.
The aim of the FX Futures Market is to minimise the disequilibrium in the Spot FX market.
It is also to attract capital inflows to the country’s fixed income and equity markets and to achieve naira exchange rate stability.
According to Gwadebe, the futures market is just a hedging instrument that is designed to reassure international investors of the safety of their funds within a specific period.
“The OTC futures market is a risk product designed primarily to address the fears of foreign investors.
“The international investors want to be sure of the stability of their investment at the foreign exchange market,’’ Gwadebe said.
The ABCON chief noted that most of the nation’s importers were illiterate and their understanding of the technicalities involved in the new FX policies posed a great challenge to them.
Gwadebe explained that the new policy could be applied to a fraction of importers and that the market was only subject to available cash.
“It is a product that is subject to the availability of liquid,’’ Gwadebe said.
NAN reports that the apex bank, while launching the futures market, said it remained steadfast to position the Nigerian foreign exchange market to be competitive, transparent, liquid and diversified.
It said the launching of the market was an important innovation in Nigeria’s financial markets.
It added that the product would offer all the opportunity to reduce the volatility witnessed in the FX market in the past. (NAN)