The Central Bank of Nigeria (CBN) has announced the introduction of the Electronic Foreign Exchange Matching System (EFEMS) for Foreign Exchange transactions in the Nigerian Foreign Exchange Market (NFEM). This system is set to be implemented no later than December 1, 2024, with a two-week test run scheduled for November.
According to the CBN, the new system aims to enhance governance, transparency, and facilitate a market-driven exchange rate accessible to the public. The EFEMS is expected to:
- Curb speculative activities
- Reduce market distortions
- Provide the CBN with improved oversight capabilities for regulating the market effectively
The CBN will publish real-time data on prices and buy/sell orders from the EFEMS. Additionally, in collaboration with the Financial Markets Dealers Association (FMDA), the CBN will release the rules for operating the system.
The Nigerian FX Code and revised Market Operating Guidelines will also offer guidance to market participants. Authorized Dealers are required to ensure full compliance with the existing guidelines governing the Nigerian foreign exchange market. They must complete all necessary documentation, training, and system integrations ahead of the December go-live date.
