The Central Bank of Nigeria (CBN) has announced the introduction of an electronic foreign exchange matching system (EFEMS).
The system is expected to reduce speculative activities, eliminate market distortions and give the CBN improved oversight capabilities to effectively regulate the market.
CBN director, financial markets department, Omolara Duke, said in a statement that the system, which is for FX transactions, would be implemented no later than December 1, but to be preceded by be a 2-week test run in November.
“Authorised Dealers would subsequently conduct all foreign exchange transactions in the interbank Fx market on the Electronic Foreign Exchange Matching System approved by the CBN where transactions will be reflected immediately,” the CBN said.
“The new system is 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,” the statement added.
The CBN said it would publish real-time prices and buy/sell order data from the system.
In partnership with the Financial Markets Dealers Association (FMDA), the bank said it would 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,” CBN said.
The CBN said authorised dealers are required to abide by extant guidelines and regulations governing the FX market and also asked authorised dealers to ensure that all necessary documentation, training, and systems integrations are concluded before the go-live date.
