In a move to increase transparency and efficiency in Nigeria’s foreign exchange market, the Central Bank of Nigeria (CBN) has announced the introduction of the Electronic Foreign Exchange Matching System (EFEMS), set to launch on December 1, 2024.
This innovative system aims to improve governance, promote a market-driven exchange rate, and make transactions more accessible to the public.
According to the CBN circular that announced this programme, to ensure a seamless transition, the apex bank has planned a two-week test run in November 2024.
Additionally, in collaboration with the Financial Markets Dealers Association (FMDA), the CBN will release rules for operating the system, while the Nigerian FX Code and revised Market Operating Guidelines will provide guidance to market participants.
This development is expected to reshape Nigeria’s FX landscape, promoting a more transparent and efficient foreign exchange market. With EFEMS, Nigeria takes a significant step towards streamlining its foreign exchange processes, making it more attractive to foreign investors and beneficial for its citizens.
Key Benefits of EFEMS
Improved Governance: EFEMS will enhance the overall functioning of the foreign exchange market
Market-Driven Exchange Rate: The system will promote a more realistic exchange rate, beneficial for businesses and individuals alike
Increased Accessibility: Transactions will become easier and more convenient for the public
Reduced Speculation: EFEMS is expected to minimize speculative activities and market distortions
