The Central Bank of Nigeria (CBN) is introducing a new Electronic Foreign Exchange Matching System to boost transparency in Nigeria’s forex market. The new electronic system is geared towards reshaping how foreign exchange transactions are conducted in the interbank market in Nigeria by promoting a market-driven exchange rate that is accessible to the public.
Also, the new electronic system will make it mandatory for all authorised dealers to conduct their FX transactions using the platform, ensuring that transactions are immediately reflected within the market.
As Nigeria grapples with currency instability and speculative trading, this new system is seen as crucial to creating a stable forex market in the country.
The creation of this new electronic system comes after the CBN’s retail dutch auction. This is part of the CBN’s strategy to create a Nigerian FX market that functions more smoothly and efficiently.
Through the system, the CBN aims to reduce speculative activities in the FX market while offering up to date information on exchange rates, including buy/sell orders. The new system will undergo a two-week test run in November before it becomes fully operational on December 1st, 2024.
As the system approaches its launch, authorised dealers are required to adhere to current regulations and finalise the requisite documentation, training, and system integration prior to the implementation deadline.
