The Central Bank of Nigeria (CBN) has announced the launch of a new electronic foreign exchange matching system (EFEMS) designed to enhance transparency and governance in the foreign exchange market.
In a circular released on Thursday by Omolara Duke, CBN’s Director of the Financial Markets Department, it was stated that the system is set to go live by December 1, 2024, with a two-week testing period planned for 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,” the CBN stated.
The EFEMS aims to establish a more market-driven exchange rate and improve transparency, ensuring that it will ultimately be accessible to the public.
“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 added.
As part of its initiative to enhance the FX market, the CBN also announced that real-time prices and buy/sell order data will be published through the new system.
In partnership with the Financial Markets Dealers Association (FMDA), the CBN will provide guidelines for the operations of EFEMS.
“The Nigerian FX Code and revised Market Operating Guidelines for the Nigeria Foreign Exchange Market will also provide guidance to market participants,” the CBN noted.
The apex bank further instructed authorized dealers to comply with all existing guidelines and regulations governing the FX market.
In anticipation of the EFEMS launch, the CBN advised these dealers to complete all necessary documentation, training, and system integrations before the go-live date.
