CBN Takes Fresh Step to Increase the Value of the Naira Against the Dollar

Introduces Electronic Foreign Exchange Matching System to Enhance Transparency in Nigeria’s Forex Market

The Central Bank of Nigeria (CBN) has officially announced the launch of the Electronic Foreign Exchange Matching System (EFEMS) for Foreign Exchange (FX) transactions within the Nigerian Foreign Exchange Market (NFEM). This system, designed to streamline forex trading, is set for implementation no later than December 1, 2024. However, a two-week test run is scheduled for November 2024 to ensure a smooth transition.

EFEMS is expected to revolutionize the foreign exchange process in Nigeria by providing a more transparent and market-driven exchange rate that will be accessible to the general public. The new system will significantly reduce market distortions and speculative activities, while empowering the CBN with greater oversight capabilities to regulate the forex market effectively.

Authorised Dealers will be required to conduct all FX transactions through this new platform. The real-time price and order data provided by the system will be published in collaboration with the Financial Markets Dealers Association (FMDA), ensuring that buyers and sellers have accurate and up-to-date information. The introduction of EFEMS is aimed at increasing transparency, improving governance, and creating a more reliable exchange rate that reflects true market conditions.

Furthermore, the CBN has issued a call to Authorised Dealers, urging them to comply with the existing guidelines that govern the Nigerian forex market. They are expected to complete the necessary documentation, training, and systems integrations before the official go-live date.

With these new developments, the Nigerian FX Code and Market Operating Guidelines will be updated to support the transition. This move represents a significant step in the ongoing efforts to modernize Nigeria’s financial markets and promote stability in the country’s forex ecosystem.