CBN Announces Launch of Electronic Foreign Exchange Matching System (EFEMS) for Improved Market Governance

In a statement issued by Omolara Duke, the Director of the Financial Markets Department, the Central Bank of Nigeria (CBN) announced the launch of the Electronic Foreign Exchange Matching System (EFEMS) for foreign exchange transactions in the Nigerian Foreign Exchange Market (NFEM). The new system is expected to enhance governance, increase transparency, and enable a market-driven exchange rate. The system is set to be available to the general public by December 1, 2024.

“This development is expected to reduce speculative activities, eliminate market distortions, and provide the CBN with improved oversight capabilities to better regulate the market,” Duke explained.

She further noted that authorised dealers would be required to conduct all foreign exchange transactions in the interbank FX market through the EFEMS. All transactions will be reflected immediately on the system, which has been approved by the CBN.

Additionally, Duke mentioned that once the EFEMS is operational, the apex bank will publish real-time prices and will conduct a two-week test run in November to ensure seamless integration. The CBN, in collaboration with the Financial Markets Dealers Association (FMDA), will also publish the EFEMS rules, alongside purchase and sell order data from the system.

“The Nigerian FX Code and revised Market Operating Guidelines for the Nigeria Foreign Exchange Market will also provide guidance to market participants,” she said. Duke emphasized that authorised dealers are required to comply with existing guidelines and regulations governing the Nigerian foreign exchange market. She also urged them to ensure that all necessary documentation, training, and system integrations are completed ahead of the go-live date.