The apex bank introduces EFEMS to boost transparency and governance in the Nigerian foreign exchange market, launching in December 2024

[dropcap]T[/dropcap]he Central Bank of Nigeria (CBN) has announced the introduction of the Electronic Foreign Exchange Matching System (EFEMS), set to streamline foreign exchange (FX) transactions in the Nigerian Foreign Exchange Market (NFEM).

Also read: CBN directs PoS transactions to route through licensed aggregators

The system will officially go live by December 1, 2024, with a test run scheduled for November.

EFEMS aims to improve transparency, governance, and oversight within the foreign exchange market. Under the new system, all FX transactions in the interbank market must be conducted electronically, ensuring immediate transaction visibility. This shift is expected to reduce speculative trading and eliminate market distortions, fostering a more stable and transparent exchange rate system accessible to the public.

The CBN will publish real-time data on prices and buy/sell orders through EFEMS. Additionally, in collaboration with the Financial Markets Dealers Association (FMDA), the central bank will issue rules governing the system’s operations. The Nigerian FX Code and revised Market Operating Guidelines will offer further guidance to market participants.

Also read: CBN drives sustainable banking, IFRS adoption to attract foreign investment

Authorised dealers are required to comply with existing regulations and ensure all necessary preparations, such as documentation, training, and system integration, are completed before the system’s launch.

Rtn. Victor Ojelabi

Ojelabi, the publisher of Freelanews, is an award winning and professionally trained mass communicator, who writes ruthlessly about pop culture, religion, politics and entertainment.