FMDQ Securities Exchange Limited has said it is set to host a live webinar for stakeholders of the Nigerian financial market to discuss how to combat currency exchange volatility through risk management tools. FMDQ said the webinar, slated for Wednesday, would provide an opportunity for market participants, including Nigerian corporates, foreign portfolio investors, and other investors, to improve their knowledge of derivatives products.
It said the programme would also help investors to demystify the concept of hedging their foreign exchange exposures in the Nigerian financial market, and to further understand the application of the over-the-counter forex futures product as a crucial risk management tool in achieving this.
“Managing risks and the volatilities presented by the current crisis cannot be overemphasised as they are a critical measure for business continuity at such a time as now and beyond,” the exchange said in a statement. It said businesses/individuals with interests across global markets must acknowledge, anticipate, and effectively manage these risks to enhance efficient financial planning and operations.
The FMDQ said, “In 2016, the Central Bank of Nigeria, in collaboration with FMDQ Holdings Plc, 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 forex market, the apex bank, as the pioneer seller of contracts in the market, provides quotes for contracts ranging from one-month through 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.”
According to FMDQ, as of May 2020, the market has recorded over 47 contracts maturities (totaling over $33bn) with over $46bn worth of FX futures so far traded on FMDQ Exchange since its inception.