The launch of the Electronic Foreign Exchange Matching System (EFEMS) by the Central Bank of Nigeria (CBN) has propelled the naira to notable gains, strengthening to N1,587.29 to the dollar in the official market and N1,640 in the parallel market.
EFEMS, which began operations on December 2, has already been credited with improving the naira’s value, with analysts hailing it as a pivotal tool in eliminating market distortions and boosting efficiency in Nigeria’s volatile foreign exchange landscape.
At the parallel market, the naira saw a positive trend starting Tuesday, moving from N1,745/$1 to N1,720/$1 after stagnation for over a month. By Wednesday, the naira appreciated sharply to N1,670/$1, and further strengthened to N1,640/$1 by Thursday.
In the official market, CBN’s Nigerian Foreign Exchange Market (NFEM) quotes showed a gradual improvement from N1,662.77 on Monday to N1,587.29 by Thursday.
EFEMS, designed to facilitate spot FX transactions between the naira and the U.S. dollar, operates through Bloomberg’s BMatch system, with a minimum trade value of $100,000. The platform is integrated with banks’ systems and ensures greater market transparency through consolidated trade statistics. It is accessible to all CBN-licensed dealer banks.
CBN Governor Mr. Olayemi Cardoso recently described EFEMS as a transformative step for market transparency and price discovery. He emphasized that the platform will correct market distortions and counter panic-driven behavior, contributing to a more stable and transparent FX environment.
Analysts, including Bismarck Rewane, CEO of Financial Derivatives, anticipate further appreciation of the naira, projecting a 10% rise in 2025, while experts like Sam Chidoka and Tilewa Adebajo praised the initiative for enhancing liquidity and market-driven pricing.
The introduction of EFEMS marks a significant step toward sanitizing Nigeria’s FX market, with stakeholders hopeful that the system will pave the way for a more transparent and resilient currency market.
