The Central Bank of Nigeria (CBN), on Thursday, introduced the Electronic Foreign Exchange Matching System (EFEMS) to check forex market distortions, eliminate speculative activities and instill transparency.
In a circular signed by Omolara Duke, director of Financial Markets Department, the bank said with this system, authorised dealers will conduct all forex transactions in the inter-bank market on the EFEMS system approved by the CBN, where transactions will be reflected immediately.
The statement said the policy will be implemented not later than December 1, 2024, noting that there will be a two-week test run in November.
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“The new system is expected to enhance governance, transparency and facilitate a market-driven exchange rate that will 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 apex bank noted.
The CBN said it will publish real-time prices and buy/sell orders from the system. The CBN noted that in collaboration with the Financial Markets Dealers Association, it will will publish the rules for the EFEMS.
It further said that the Nigerian FX Code and the Revised Market Operating Guidelines for the forex market will also provide guidance to market participants.
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“Authorised dealers are therefore required to comply with extant guidelines and regulations governing the Nigeria foreign exchange market and ensure that all necessary documentation, training and systems integrations are concluded ahead of the go live date.”
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