The Central Bank of Nigeria (CBN) has announced the launch of an Electronic Foreign Exchange Matching System (EFEMS), set to revolutionize the country’s foreign exchange market. The new system will be operational by December 1, 2024, following a two-week test run in November.
The EFEMS aims to enhance transparency and establish a market-driven exchange rate accessible to the public. According to a circular from Omolara O. Duke, Director of the Financial Markets Department at the CBN, all authorized dealers will be required to conduct foreign exchange transactions through this platform, ensuring immediate market reflection of these transactions.
“This initiative will help to mitigate currency instability and speculative trading that have plagued the market,” the circular stated. The CBN intends for the EFEMS to reduce market distortions and provide real-time data on exchange rates, including buy and sell orders.
The CBN’s commitment to improving governance and regulatory oversight is evident in this new system. It plans to publish real-time prices and transaction data, collaborating with the Financial Markets Dealers Association to clarify the operational rules for EFEMS. Revised guidelines and the Nigerian FX Code will also support market participants.
As the December launch date approaches, authorized dealers must ensure compliance with existing regulations and complete necessary preparations, including documentation and training for the new system. The CBN’s initiative is poised to bring significant changes to Nigeria’s foreign exchange landscape, fostering a more stable and efficient market.
