The impact of EFEMS has been evident, with the naira appreciating in both the official and unofficial foreign exchange markets.
In the official market, the naira recovered from an exchange rate of N1,688 before December 2024 to N1,539.55 as of Monday, December 23, 2024.
In the black market, the naira’s exchange rate against the dollar has dropped to N1,655/$1 as of Monday.
The effectiveness of EFEMS has sparked increased interest among Nigerians, with the CBN providing more information to meet this demand.
1. What is the Electronic Foreign Exchange Matching System (EFEMS)?
EFEMS is an electronic platform introduced by the CBN for conducting foreign exchange (FX) transactions in the Nigerian Foreign Exchange Market (NFEM).
It is designed to match, buy and sell orders automatically, enhancing transparency and governance in FX trading.
2. When will EFEMS be implemented?
EFEMS was fully implemented in the interbank foreign exchange market from December 1, 2024, after a two-week test run in November 2024.
3. What are the key benefits of adopting EFEMS for Nigeria’s FX trade?
EFEMS provides real-time pricing and visibility of buy/sell orders, reducing opacity in the FX market.
Automated matching of orders ensures market participants transact at the best prices, reducing price manipulation and distortions.
The system limits speculative trading and reduces volatility caused by market distortions.
It enhances oversight, allowing better regulation and monitoring of FX activities.
Real-time data will be accessible to the public, contributing to a more informed and efficient market.
4. How will EFEMS work in the Nigerian foreign exchange market?
Authorized Dealers will use EFEMS to place buy and sell orders in real-time. The system will automatically match corresponding orders based on predetermined rules, ensuring swift execution of transactions.
All transactions will be reflected immediately in the system for market participants and regulators.
5. What changes will EFEMS bring to the current FX trading process?
