The Central Bank of Nigeria (CBN) has announced the introduction of an electronic foreign exchange matching system (EFEMS) as part of its policy aimed at reforming the Nigerian Foreign Exchange Market (NFEM).
This digital platform is expected to improve the governance and transparency of the interbank FX market with full implementation set for December 1, 2024.
The CBN in a circular addressed to Authorised Dealers on Thursday, and signed by Dr. Omolara O. Duke, the Director of the CBN’s Financial Markets Department, outlined the details of the system.
CBN said there would be a 2-week test run in November.
“Authorised Dealers would subsequently conduct all foreign exchange transactions in the interbank Fx market on the Electronic Foreign Exchange Matching System approved by the CBN where transactions will be reflected immediately,” CBN said.
“The new system is expected to enhance governance, transparency and facilitate a market-driven exchange rate that will be accessible to the public.
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“This development is expected to reduce speculative activities, eliminate market distortions and give the CBN improved oversight capabilities to effectively regulate the market.”
The CBN said it would publish real-time prices and buy/sell order data from the system.
In partnership with the Financial Markets Dealers Association (FMDA), the bank said it would publish the rules for the EFEMS.
“The Nigerian FX Code and revised Market Operating Guidelines for the Nigeria Foreign Exchange Market will also provide guidance to market participants,” CBN said.
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