The Central Bank of Nigeria (CBN) has announced updated guidelines for interbank foreign exchange (FX) trading using the Electronic Foreign Exchange Matching System (EFEMS), setting a minimum trade value of $100,000. The directive, dated November 25, 2024, and signed by Dr. Omolara Duke, Director of the Financial Markets Department, aims to enhance transparency, streamline operations, and ensure compliance in the country’s FX market.
Bloomberg’s BMatch platform has been designated as the official order-matching system for interbank FX transactions, with trading hours scheduled from 9:00 a.m. to 4:00 p.m. (WAT) on business days. Transactions on EFEMS must adhere to a minimum tradable amount of $100,000, with additional trades in increments of $50,000. The system is currently limited to spot FX transactions between the Nigerian naira and the U.S. dollar, although the CBN may add more currency pairs in the future. All trades will remain anonymous until they are finalized, at which point the counterparties’ details will be disclosed.
Participation in EFEMS is restricted to CBN-authorized dealer banks, while other institutions must seek prior approval. Participants are required to sign agreements with Bloomberg, set credit and settlement limits, and comply with the Nigerian Foreign Exchange Code and CBN regulations. Institutions wishing to leave the platform must provide a 30-day notice and clear any pending obligations.
The CBN will closely monitor all transactions conducted on EFEMS to uphold market integrity and compliance. Participants must submit daily reports covering trade volumes, settlement statuses, and counterparties. Non-compliance with the guidelines will attract penalties, including suspension or revocation of access to the platform. Additionally, any trades conducted outside EFEMS must be reported within 10 minutes and logged into the FX blotter.
The Bloomberg BMatch system will officially launch as the EFEMS platform on December 2, 2024. The CBN has instructed all authorized dealers and banks in the interbank FX market to adopt the system for their trading activities. This platform is expected to ensure uniformity, facilitate seamless trading, and enable efficient market oversight by the central bank.
The CBN has encouraged participating banks to collaborate with Bloomberg representatives to resolve technical issues and ensure smooth onboarding.
These guidelines reflect the CBN’s broader efforts to modernize Nigeria’s FX market and mitigate counterparty risks. By introducing the Bloomberg BMatch platform, the apex bank aims to enhance efficiency, strengthen compliance, and foster a transparent trading environment. The CBN has committed to periodically reviewing the platform’s operations to maintain its effectiveness and alignment with market needs.
