CBN introduces matching system to eliminate FX market distortions

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.

“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.

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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.

“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.”

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.