The Central Bank of Nigeria, CBN, has announced the
introduction of the Electronic Foreign Exchange Matching System, EFEMS, for
foreign exchange transactions in the Nigerian Foreign Exchange Market, NFEM. According to a statement by Omolara Duke, Director,
Financial Markets Department, EFEMS will be implemented not later than December
1. Duke said that the new system was expected to enhance
governance, transparency, and facilitate a market-driven exchange rate that
will be accessible to the public. “This development is expected to reduce speculative
activities, eliminate market distortions, and give the CBN improved oversight
capabilities to effectively regulate the market. “Authorised dealers would subsequently conduct all foreign
exchange transactions in the interbank Fx market on the EFEMS approved by the
CBN where transactions will be reflected immediately,” she said. She said that there would be a two-week test run in
November, adding that the apex bank would publish real time prices when the
EFEMS starts to operate. She said that the CBN would also buy and sell orders 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 will also provide guidance
to market participants. “Authorised dealers are, therefore, required to comply with
extant guidelines and regulations governing the Nigeria foreign exchange
market. “They should ensure that all necessary documentation,
training, and systems integrations are concluded ahead of the go live date,”
she said.
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