The transparency in the Central Bank of Nigeria’s new Electronic Foreign Exchange Matching System (EFEMS) has made currency speculators and illegal market operators source FX elsewhere.
The development has pushed the demand for the naira in the parallel market.
Apart from illegal traders, legitimate buyers who cannot meet the new platform’s requirements have also opted for the parallel market, aiding the value of the local currency.
Analysts said most people with no business in the official market now made use of the parallel market, explaining the rising demand in the black market.
They added that fraudsters, Ponzi scheme operators and illicit traders patronised the parallel market instead of the newly introduced EFEMS.
TimesNow.com.ng earlier reported that the CBN directed commercial banks to adopt the Bloomberg BMatch system trading system.
The new platform became operational on December 2, 2024, aiming to boost transparency and operational efficiency in Nigeria’s Forex market.
The apex bank issued guidelines via EFEMS for the interbank FX market trading system operations. To enhance transparency and efficiency in the market, it pegged the minimum tradable amount at $10,000.
CBN’s director of the financial markets department, Omolara Duke, disclosed this in a circular to all the banks.
The circular said the EFEMS initiative would ensure transparent, fair and efficient FX trading, reduce risks, and enforce compliance with CBN regulators.
According to reports, the naira has gained about N147.69 since introducing the EFEMS.
The Nigerian currency rose to N1,515 per dollar in the parallel market on Friday, December 6, 2024, as traders sold dollars in response to the new guideline, recording a five-day winning streak.
The naira appreciated 0.85% or N13 as the dollar sold for N1,545 on the EFEMS.
Data from CBN showed that the naira traded at N1,680 per dollar on Thursday, December 12, 2024, relative to N1,715 recorded on Wednesday, December 11, 2024, due to moderate demands in the black market
TimesNow.com.ng earlier reported that the naira’s value rose in the official and parallel markets as dollar demands declined.
Information from the CBN showed that the Nigerian currency rose 0.85%, recording a gain of 13 in the EFEMS.
The dollar was quoted at N1,532 on Thursday, December 12, 2024, compared to N1,545 it had traded at a day before.
Proofreading by James, Ojo Adakole, journalist and copy editor at TimesNow.com.ng.
Source: TimesNow.com.ng
