The Central Bank of Nigeria (CBN) has announced that it will start using electronic foreign exchange matching systems for foreign exchange transactions in the Nigerian market from December 1st, 2024.
In a circular signed by Dr. Omolara Duke, Director of Currency Operations at the CBN, it was stated that the process will undergo a two-week test run in November 2024 before officially commencing on the stated date.
According to the statement, authorized dealers would subsequently conduct all foreign exchange transactions in the interbank FX market on the Electronic Foreign Exchange Matching system approved by the Central Bank of Nigeria, where transactions will be reflected immediately.
The circular further stated that the new system will enhance transparency and governance 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 regulate the market effectively.
“The CBN will publish real-time prices and buy/sell orders data from the system, and in collaboration with the Financial Market Dealers Association, publish the rules for the EFEMs. The Nigerian FX Code and revised Market Operating Guidelines for the Nigeria Foreign Exchange Market will also guide market participants,” the circular added.
CBN also expects market participants to comply with the extant guidelines and regulations governing the Nigerian foreign exchange market and ensure all necessary documentation, training, and systems integrations are concluded before the go-live date.
Earlier in the year, Olayemi Cardoso, the Governor of Central Bank of Nigeria, (CBN) said the apex bank is determined to combat inflation through conventional methods.
Cardoso said this during an interview with Bloomberg in London while sharing key insights on the current state of the market, mainly focusing on the stability of the naira and inflation rates.
He noted a deceleration in the month-on-month inflation rates, highlighting it as a positive development. The apex bank boss also assured that the Monetary Policy Committee (MPC) members remained vigilant in monitoring inflation trends and ensuring a moderation of inflation numbers.
