CBN announces reform aimed at transforming the country’s foreign exchange market.
Oru Leonard
The Central Bank of Nigeria (CBN) announced a groundbreaking reform aimed at transforming the country’s foreign exchange market. The Electronic Foreign Exchange Matching System (EFEMS) will revolutionize the way authorized dealers conduct foreign exchange transactions.
Dr. Omolara O. Duke, Director of the Financial Markets Department, explained that EFEMS would enhance transparency, governance, and market-driven exchange rates. “This innovative system will reduce speculative activities, eliminate market distortions, and provide the CBN with improved oversight capabilities.”
The two-week test run in November will ensure a seamless transition. By December 1, 2024, all authorized dealers must conduct interbank foreign exchange transactions on the EFEMS platform.
Market stakeholders welcomed the news. “This is a game-changer,” said Mr. Johnson, a foreign exchange dealer. “EFEMS will increase efficiency, reduce bureaucracy, and make it easier for businesses to access foreign exchange.”
The CBN will publish real-time prices and buy/sell orders data, promoting transparency. In collaboration with the Financial Markets Dealers Association (FMDA), the bank will establish rules for EFEMS.
As Nigeria’s economy continues to grow, EFEMS is poised to play a vital role in stabilizing the foreign exchange market. With this reform, the CBN reaffirms its commitment to creating a conducive business environment.
Benefits of EFEMS:
– Enhanced transparency and governance
– Market-driven exchange rates
– Reduced speculative activities
– Elimination of market distortions
– Improved oversight capabilities
– Increased efficiency
– Real-time data publication
With this move by the CBN, Nigeria’s foreign exchange market is poised for a new era of growth and stability, thanks to the innovative Electronic Foreign Exchange Matching System.
