The Central Bank of Nigeria (CBN) on Thursday announced the introduction of the Electronic Foreign Exchange Matching System (EFEMS), for Foreign Exchange (FX) transactions in the Nigerian Foreign Exchange Market (NFEM).
The new system which is to be implemented not later than December 01, 2024, and preceded by a two-week test run in November – is expected to enhance governance, transparency and facilitate a market- driven exchange rate that will be accessible to the public.
The central bank disclosed this in a circular dated October 2, 2024, which was addressed to all authorised dealers, and signed by CBN Director, Financial Markets Department, Dr. Omolara Duke.
The bank said the platform will further reduce speculative activities, eliminate market distortions and give the CBN improved oversight capabilities to effectively regulate the market.
The circular further noted that
authorised dealers would subsequently conduct all FX transactions in the interbank FX market on the EFEMS approved by the apex bank where transactions will be reflected immediately.
Authorised dealers are therefore, required to comply with extant guidelines and regulations governing the Nigeria foreign exchange market, and ensure that all necessary documentation, training, and systems integrations are concluded ahead of the go live date.
The central bank added that it will publish real time prices and buy/sell orders data from the system, and in collaboration with the Financial Markets Dealers Association (FMDA), 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.
James Emejo
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