The Central Bank of Nigeria (CBN) has mandated a minimum trade value of $100,000 for all interbank forex (FX) transactions via its Electronic Foreign Exchange Matching System (EFEMS).
The new trade value was contained in fresh guidelines signed by Dr. Omolara Duke, Director of the Financial Markets Department, and effective from November 25, 2024.
The CBN said the move is aimed at enhancing market transparency, ensuring efficient trading, and strengthening compliance within Nigeria’s FX market.
It said the newly issued guidelines are designed to streamline interbank FX trading and reduce counterparty risks. By using EFEMS, the CBN aims to create a more transparent and orderly FX market while adhering to its regulatory framework.
The CBN also designated Bloomberg’s BMatch as the official order-matching platform for these transactions, with trading hours set between 9:00 AM and 4:00 PM West Africa Time (WAT) on business days.
One of the key provisions in the guidelines is the establishment of a $100,000 minimum tradable amount per transaction.
The CBN also set incremental clip sizes of $50,000, which participants must adhere to.
The EFEMS platform, it explained, will be limited to spot FX transactions involving the Nigerian naira (NGN) and the United States dollar (USD), although the CBN reserves the right to introduce other currency pairs in the future if deemed necessary.
“All trades consummated on EFEMS are binding unless cancelled by mutual agreement of both parties with written approval from the CBN.
“The minimum tradable amount is US$100,000.00, with incremental clip sizes of US$50,000.00.
“Participants must set credit and settlement limits for other counterparties in the system. Transactions exceeding these limits will not be executed.
“Participants must have adequate credit and settlement limits set for the CBN as its counterparty bank.
“Participants are required to comply with the Nigerian Foreign Exchange Code and other CBN regulations.”
The CBN also announced that the Bloomberg BMatch system will officially go live as the EFEMS for foreign exchange trading on December 2, 2024.
The system aims to facilitate seamless and uniform trading among market participants, while also enabling the CBN to efficiently monitor market performance and manage data.
The central bank urged all authorised dealers and banks to liaise with Bloomberg representatives to expedite the onboarding process and address any technical or operational issues promptly.
