CBN
CBN introduces electronic foreign exchange matching to halt speculation
The Central Bank of Nigeria, CBN, has introduced Electronic Foreign Exchange Matching System, EFEMS, for foreign exchange transactions in the Nigerian Foreign Exchange Market, NFEM.
A statement by Omolara Duke, Director, Financial Markets Department, disclosed that EFEMS will be implemented not later than December 1.
According to Duke, the new system is expected to enhance governance, transparency, and facilitate a market-driven exchange rate that will be accessible to the public.
She said, “This development is expected to reduce speculative activities, eliminate market distortions, and give the CBN improved oversight capabilities to effectively regulate the market.
“Authorised dealers would subsequently conduct all foreign exchange transactions in the interbank Fx market on the EFEMS approved by the CBN where transactions will be reflected immediately .”
She explained that there would be a two-week test run in November, and the apex bank would publish real time prices when the EFEMS starts to operate.
She said that the CBN would also buy and 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.
“Authorised dealers are, therefore, required to comply with extant guidelines and regulations governing the Nigeria foreign exchange market.
“They should ensure that all necessary documentation, training, and systems integrations are concluded ahead of the go live date,” she said.