Naira appreciates further on black market

The pressure on the foreign exchange (FX) market is easing gradually as the naira on Wednesday appreciated to N1,715 per dollar on the parallel market.

This represents N15 gain compared to N1,730 traded the previous day on the market, also known as black market.

The naira also gained at the official market by 0.9 percent as the dollar was quoted at N1,658.36 on Tuesday as against N1,672.92 quoted on Monday at the Nigerian Autonomous Foreign Exchange Fixing (NAFEX), according to data from the FMDQ Securities Exchange limited.

The Central Bank of Nigeria’s (CBN) Electronic Foreign Exchange Matching System (EFEMS) officially kicks-off on Monday.

Read also: Naira appreciates to N1,730 as FX trading on Bloomberg BMatch system begins

EFEMS is an electronic platform introduced to tackle speculation and improve transparency in Nigeria’s FX market. It automatically matches buy and sell orders, promoting fairness and efficiency in FX trading. Financial experts have expressed optimism about EFEMS’ potential to address persistent challenges affecting the naira and Nigeria’s FX reserves.

The EFEMS system allows authorised dealers, including commercial banks, to place buy and sell orders in real time. Transactions are automatically matched based on predetermined rules, ensuring swift execution and real-time visibility for market participants and regulators.

Aminu Gwadabe, president of the Association of Bureaux De Change of Nigeria (ABCON), said EFEMS is designed to achieve price discovery, enhance oversight, and reduce speculation. “The platform intends to integrate participants for transparency and visibility as well as enhancing data collection. It will ensure that participants trading and dealing on the platform are visible and transparent,” he said.