The Central Bank of Nigeria (CBN) has introduced an Electronic Foreign Exchange Matching System (EFEMS) for all foreign exchange (FX) transactions within the Nigerian Foreign Exchange Market (NFEM). The system will go live on December 1, 2024, following a two-week test run in November.
In a circular dated October 2, 2024, signed by Dr. Jake Omolara O. Duke, CBN Director of the Financial Markets Department, the bank outlined the benefits of EFEMS, which include improved governance, transparency, and the promotion of a market-driven exchange rate accessible to the public. The system will reflect all interbank FX transactions in real-time, allowing market participants and regulators immediate access to FX data.
The CBN stated that EFEMS will help curb speculative activities and market distortions while providing the central bank with enhanced oversight for regulating the market more effectively. Real-time data on FX prices and buy/sell orders will be available, with operational guidelines issued in collaboration with the Financial Markets Dealers Association (FMDA).
All authorized dealers are required to comply with existing FX market guidelines, complete system integrations, and undergo training before the December launch. This initiative is expected to significantly improve the transparency and efficiency of Nigeria’s foreign exchange market.
