The Central Bank of Nigeria (CBN) has announced the introduction of a new electronic foreign exchange matching system (EFEMS) aimed at improving transparency and governance in the FX market. According to a circular released on Thursday by Omolara Duke, CBN’s Director of the Financial Markets Department, the system is scheduled to go live no later than December 1, 2024, with a 2-week test run 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 is designed to create a more market-driven exchange rate and enhance transparency, which 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,” CBN added.
As part of its efforts to improve the FX market, the CBN also announced that real-time prices and buy/sell order data will be published through the new system. In collaboration with the Financial Markets Dealers Association (FMDA), the CBN will release guidelines for EFEMS operations.
“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 ensure compliance with all existing guidelines and regulations governing the FX market. In preparation for the EFEMS launch, the CBN advised authorized dealers to finalize all necessary documentation, training, and systems integrations ahead of the go-live date.