The Central Bank of Nigeria (CBN) has introduced a minimum trade value of $100,000 for interbank foreign exchange transactions conducted via the Electronic Foreign Exchange Matching System (EFEMS). The move is part of the CBN’s efforts to enhance market transparency, improve efficiency, and ensure compliance within Nigeria’s foreign exchange market.
The directive, signed by Dr. Omolara Duke, the CBN’s Director of the Financial Markets Department, was issued on November 25, 2024. It sets out key guidelines for trading on the EFEMS, a platform designed to streamline interbank FX trading, mitigate counterparty risks, and align with CBN regulations.
“Ensuring transparency and adherence to regulations within the FX market is vital, and the EFEMS will play a key role in this,” said Dr. Duke. The platform, which will be officially powered by Bloomberg’s BMatch, is dedicated to spot transactions involving the Nigerian naira and the US dollar, with trading hours from 9:00 AM to 4:00 PM West Africa Time on business days.
The $100,000 minimum tradable amount also comes with incremental clip sizes of $50,000. The CBN emphasized that only authorized dealer banks can participate in EFEMS, with other institutions requiring prior approval.
Furthermore, participants are mandated to set appropriate credit and settlement limits for counterparties, and any transactions exceeding these limits will not be executed. The CBN has also stressed that it will monitor all trades to ensure the integrity of the platform and will periodically review its operations to maintain compliance with regulatory standards.
The new guidelines also require that trades on EFEMS remain anonymous until they are matched, and any transaction conducted outside the platform’s prescribed parameters must be reported promptly.
The EFEMS platform is scheduled to go live on December 2, 2024, marking a new chapter in Nigeria’s foreign exchange operations. The CBN’s close monitoring of the system is expected to foster transparency and enhance the stability of the country’s FX market.
