The Central Bank of Nigeria (CBN), on Friday, announced that it sold foreign currencies worth $543.5 million to authorised dealer banks, through two-way quotes, at the Nigerian foreign exchange market (NFEM) on eleven dealing days in September.
A press release posted on the apex bank’s website, signed by its Director, Financial Markets Department, Omolara Duke, said that the FX spot sales, which took place between September 6 and September 30, 2024, were aimed at reducing , “observed market volatility driven by high demand for commodity importation and seasonal demand for forex.”
The regulator said it issued the press release in order, “educate and provide guidance to the general public on the pricing of FX by taking a cue from the range of rates at which FX was sold by the CBN to Authorised Dealer Banks.”
The statement added that the CBN will continue to facilitate the supply of FX into the NFEM, “as part of its holistic FX management strategy.”
An analysis of the fx sales data for the eleven dealing days published by the apex bank, shows that it sold the highest amount of $80 million on September 26 and the lowest amount of $17.5 million on September 23.
Further analysis of the data indicates that the CBN sold the forex to the authorised dealer banks at rates ranging between N1,530 per dollar and N1,605 per dollar.
On Thursday, the apex bank issued a circular announcing that it has introduced a new system called, the Electronic Foreign Exchange Matching System (EFEMS) for forex transactions in the Nigerian Foreign Exchange Market (NFEM).
It said the EFEMS will be implemented not later than December 1, 2024, adding that there will be a two-week test run in the month of November.
According to the circular, authorised dealers would subsequently conduct all forex transactions in the interbank forex market on the Electronic Foreign Exchange Matching System (EFEMS) approved by the CBN, “where transactions will be reflected immediately.”
The statement further said: “The new system is expected to enhance governance, transparency, and facilitate a gradual market driven exchange rate that will be accessible to the public. The development is expected to reduce speculative activities, eliminate market distortions and give the CBN improved oversight capabilities to effectively regulate the market.
“The CBN will publish real time prices and buy/sell orders data from the system and in collaboration with the Financial Markets Dealers Association (FMDA), publish the rules for the EFEMS. The Nigerian FX Code and revised market operating guidelines for the Nigeria foreign exchange market will also provide guidance to market participants.”
