CBN issues fresh guidelines on FX system to promote transparency, efficiency

The Central Bank of Nigeria (CBN), on Tuesday, issued comprehensive guidelines for the operations of the interbank foreign exchange (FX) trading system via the Electronic Foreign Exchange Matching System (EFEMS).

The apex bank pegged the minimum tradable amount at $100,000, with incremental clip sizes of US$50,000 to promote transparency and efficiency in the FX market.

The new guideline is expected to be effective from December 2, 2024.

In the guidelines for EFEMS, the CBN added that participants must set credit and settlement limits for other counterparties in the system and that transactions exceeding these limits will not be executed.

The CBN said: “The minimum tradable amount is $100,000.00, with incremental clip sizes of $50,000.00.

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“Participants must set credit and settlement limits for other counterparties in the system. Transactions exceeding these limits will not be executed.”

Also, in a circular to all banks in the interbank forex market signed by the Director, Financial Markets Department, CBN, Dr. Omolara Duke, the CBN said: “The CBN hereby states that effective from December 2, 2024, Authorised Dealers will go live in the use of the Bloomberg BMatch as the Electronic Foreign Exchange Matching System (EFEMS) for its FX trading activities in the FX market.

“The Bloomberg BMatch platform will enhance the integrity and operational efficiency of the FX market by providing transparent and automated matching of trades leading to market efficiency and greater price discovery.

“In alignment with this initiative, all banks participating in the interbank FX market are advised to deploy the Bloomberg BMatch system for their FX trading activities, to ensure uniformity and seamless trading amongst market participants and provide CBN with the regulatory role to monitor the market performance and data management.”

By: Babajide Okeowo

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