The Central Bank of Nigeria has introduced new guidelines for interbank foreign exchange trading, effective from November 25, 2024.
These guidelines stipulate that trades on the Electronic Foreign Exchange Matching System must have a minimum value of $100,000.
The CBN’s Director of the Financial Markets Department, Dr. Omolara Duke, highlighted on Tuesday that this measure aims to improve transparency, efficiency, and compliance within Nigeria’s FX market.
The EFEMS is expected to reduce counterparty risks and enhance adherence to CBN regulations.
The apex bank has designated Bloomberg’s BMatch as the official order-matching platform for interbank transactions, with trading hours set between 9:00 am and 4:00 pm West Africa Time on business days.
One notable provision in the guidelines is the enforcement of a $100,000 minimum tradable amount, with incremental clip sizes of $50,000.
The CBN retains the discretion to introduce additional currency pairs to the EFEMS as deemed necessary.
The guidelines document read, “All trades consummated on EFEMS are binding unless canceled by mutual agreement of both parties with written approval from the CBN.
“The minimum tradable amount is US$100,000.00, with incremental clip sizes of US$50,000.00.
“Participants must set credit and settlement limits for other counterparties in the system. Transactions exceeding these limits will not be executed.
“Participants must have adequate credit and settlement limits set for the CBN as its counterparty bank.
“Participants are required to comply with the Nigerian Foreign Exchange Code and other CBN regulations.”
Participation in the EFEMS is restricted to authorized dealer banks that are licensed by the CBN.
Other institutions wishing to join the platform must first obtain prior approval from the CBN.
Participants are also required to execute agreements with the CBN-approved platform provider, maintain accurate profiles, and operate within prescribed credit and settlement limits.
The guidelines stipulate that withdrawal from the EFEMS requires a 30-day prior notice and the resolution of any outstanding obligations.
Additionally, trades conducted on the platform will remain anonymous until matched, with counterparty details disclosed only after transactions are finalized, in accordance with settlement protocols.
Transactions exceeding set limits or conducted outside EFEMS parameters must be reported promptly and logged onto the FX blotter within 10 minutes.
The CBN emphasised that it will closely monitor all transactions on EFEMS to ensure market integrity and transparency.
Participants in the EFEMS are mandated to submit daily reports covering trade volumes, settlement statuses, and counterparties.
The CBN may publish aggregated or disaggregated trade data for market analysis, adhering to confidentiality agreements.
Violations of the EFEMS guidelines or related regulations will attract strict penalties, including suspension or revocation of access rights.
[11/27, 2:23 PM] M: ICYMI: CBN sets Banks’ minimum trade on FX platform at $100,000
