CBN launches electronic Fx matching system to curb speculation

Busayo Samuel

The Central Bank of Nigeria (CBN) has launched the electronic foreign exchange matching system (EFEMS).

A circular issued on Thursday by Omolara Duke, the apex bank’s director of financial markets department, said the system, which is for forex (Fx) transactions, would be implemented not later than December 1.

She said there would be a two-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 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,” Duke said.

CBN said it would publish real-time prices and buy/sell order data from the system, adding that in partnership with the Financial Markets Dealers Association (FMDA), it would publish the rules for EFEMS.

“The Nigerian Fx Code and revised Market Operating Guidelines for the Nigeria Foreign Exchange Market will also provide guidance to market participants,” the director said.

According to the statement, authorised dealers are required to abide by extant guidelines and regulations governing the Fx market.

Duke asked authorised dealers to ensure that all necessary documentation, training, and systems integrations are concluded before the go-live date.