Naira records second fall in official market since EFEMS' commencement

The naira, on Wednesday, fell against the dollar for the second time in the official market, since the introduction of the new trading platform by the Central bank of Nigeria (CBN) due to increased demand for the US currency.

After trading on Wednesday, the naira depreciated by 1.3 percent or N20 as the dollar was quoted at N1,545 compared to N1,525 quoted on Tuesday on the Electronic Foreign Exchange Matching System (EFEMS), data from the CBN showed.

Authorised currency dealers quoted the dollar at the rate of N1,557 per dollar on Wednesday, slightly stronger than N1,560 seen on Tuesday. The market recorded a lower bid of N1,515 per dollar, which was lower than N1,500 quoted on the previous day.

The naira on Wednesday continued its third straight free fall on the parallel market depreciating to a new low of N1,710 per dollar since the introduction of the EFEMS by the CBN.

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Currency traders blame the renewed naira depreciation to increased demand for dollars by importers and individuals traveling for tourism, health and other needs. “The dollar dropped earlier because people were not buying as they were ‘waiting and watching’ the CBN’s new electronic trading platform but now they have resumed buying and selling,” one trader told BusinessDay.

On Tuesday, November 26, 2024, the CBN issued a directive which required all banks operating in the interbank FX market to adopt the Bloomberg BMatch system for trading. The platform, which became operational on December 2, 2024, aims to enhance transparency and operational efficiency in Nigeria’s FX market.

The CBN also issued comprehensive guidelines for the operations of the interbank foreign exchange (FX) trading system via the Electronic Foreign Exchange Matching System (EFEMS), pegging the minimum tradable amount at $100,000 with incremental clip sizes of US$50,000.00, to promote transparency and efficiency in the FX market.

Omolara Duke, the CBN’s director of the financial markets department, announced this in a circular sent to all banks on Tuesday. According to Duke, the EFEMS initiative is designed to ensure “transparent, fair, and efficient FX trading, minimise counterparty risks, and enforce compliance with CBN regulations.”

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.