The Central Bank of Nigeria (CBN) has introduced new guidelines for interbank foreign exchange trading through the Electronic Foreign Exchange Matching System (EFEMS), requiring a minimum trade value of $100,000. This directive, signed by Dr. Omolara Duke, Director of the Financial Markets Department, aims to enhance transparency, efficiency, and adherence to FX market regulations. EFEMS will exclusively facilitate spot transactions between the Nigerian naira and the US dollar, with incremental trading sizes set at $50,000, and will operate during business hours via Bloomberg’s BMatch platform.
Participation in EFEMS is restricted to CBN-authorized dealer banks, while other institutions must seek prior approval. Key requirements include maintaining credit and settlement limits, adhering to the Nigerian Foreign Exchange Code, and submitting daily trade reports. Transactions on the platform will be anonymous until matched, ensuring market confidentiality and integrity. Non-compliance or breaches of the guidelines may result in severe penalties, including suspension or revocation of access.
Bloomberg BMatch is set to officially launch on December 2, 2024, with the CBN mandating banks to adopt the platform for seamless FX trading. The central bank emphasizes that the system will enhance uniformity, mitigate counterparty risks, and provide a robust framework for monitoring and data management in Nigeria’s FX market. It will also periodically review operations to maintain market efficiency and compliance with its directives.
