The Central Bank of Nigeria has unveiled plans for the Electronic Foreign Exchange Matching System (EFEMS) to revolutionize the country’s foreign exchange market. The system is expected to launch on December 1, 2024, after a trial period in November. EFEMS aims to bring transparency and a market-driven exchange rate accessible to all participants in the interbank market. The system will require authorized dealers to conduct all foreign exchange transactions using the platform, ensuring immediate reflection of transactions within the market.
This initiative is timely as Nigeria faces challenges of currency instability and speculative trading, leading to market distortions. By implementing EFEMS, the CBN hopes to curb speculative activities and provide real-time exchange rate data, including buy/sell orders. The system is designed to improve governance, transparency, and regulatory oversight, ultimately creating a more efficient FX market.
The collaboration between the CBN and the Financial Markets Dealers Association will establish clear rules for EFEMS, supported by updated Market Operating Guidelines and the Nigerian FX Code. This partnership aims to enhance market functionality and ensure a smoother operation of the Nigerian FX market. Authorized dealers are required to adhere to regulations, complete necessary training, documentation, and system integration ahead of the system’s official launch.