The Central Bank of Nigeria (CBN) is to introduce the Electronic Foreign Exchange Matching System (EFEMS) for Foreign Exchange (FX) transactions in the Nigerian Foreign Exchange Market (NFEM).
The apex bank, which announced the impending introduction on Wednesday in circular No. FMD/DIR/PUB/CIR/001/021 to all authorized FX dealers, said implementation of the new system would commence not later than December 1, 2024.
Test of the new system is expected to run for about two weeks in November 2024, after which authorized dealers will be conducting all FX transactions in the interbank FX market on the system to ensure all transactions reflected immediately.
In a statement by its Director, Financial Markets Department, Omolara O. Duke, the CBN said the new system would enhance governance and transparency and facilitate a market-driven exchange rate that would be accessible to the public.
“This development is expected to reduce speculative activities, eliminate market distortions and give the CBN improved oversight capabilities to regulate the market effectively,” Duke said.
She said the CBN would publish real-time prices and buy/sell order 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, the statement said, would also provide guidance to market participants.
She said authorized dealers were required to comply with extant guidelines and regulations governing the Nigeria foreign exchange market and ensure that all necessary documentation, training, and systems integrations were concluded ahead of the date the new system is to go live.
