The Central Bank of Nigeria (CBN) has announced a minimum trade value of $100,000 for interbank foreign exchange trading through the Electronic Foreign Exchange Matching System (EFEMS).
In a directive dated November 25, 2024, signed by Dr. Omolara Duke, Director of the Financial Markets Department, the CBN stated that the measure aims to enhance transparency, efficiency, and compliance in Nigeria’s FX market.
The EFEMS is designed to streamline interbank FX trading by reducing counterparty risks and ensuring adherence to regulatory standards. The system will use Bloomberg’s BMatch as its official order-matching platform, with trading hours set between 9:00 am and 4:00 pm West Africa Time on business days.
The directive specifies a minimum tradable amount of $100,000, with incremental clip sizes of $50,000. It also limits the EFEMS to spot FX transactions involving the Nigerian naira and the US dollar, while retaining the discretion to introduce other currency pairs in the future.
According to the guidelines, trades conducted on EFEMS will be binding unless canceled by mutual agreement and written approval from the CBN. Participants must set credit and settlement limits for counterparties, as transactions exceeding these limits will not be executed.
Participation in EFEMS is limited to authorized dealer banks licensed by the CBN. Other institutions must obtain prior approval and meet requirements such as executing agreements with the approved platform provider and maintaining accurate profiles. Withdrawal from the platform requires a 30-day notice and resolution of outstanding obligations.
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The CBN has emphasized strict compliance, warning that violations of EFEMS guidelines could result in penalties, including suspension or revocation of access rights. All trades on EFEMS will remain anonymous until matched, with counterparty details revealed only upon transaction completion.
The apex bank will monitor transactions closely to ensure market integrity and transparency. Participants are required to submit daily reports detailing trade volumes, settlement statuses, and counterparties. Additionally, the CBN reserves the right to publish aggregated trade data for market analysis, subject to confidentiality agreements.
The Bloomberg BMatch system will officially go live as EFEMS for foreign exchange trading on December 2, 2024.
