Naira strengthens by N125/$ following EFEMS rollout

BUSINESSDAY NG

The naira has witnessed a notable recovery, appreciating by N125 against the dollar within a month following the implementation of the Electronic Foreign Exchange Matching System (EFEMS).

This development, which marks a significant shift in Nigeria’s foreign exchange market, was confirmed by data from the Central Bank of Nigeria (CBN).

According to the CBN, the naira strengthened by 8 percent as the dollar was quoted at N1,535 on January 3, 2025, compared to N1,660 quoted on December 2, 2024, the official launch date of EFEMS trading.

The introduction of EFEMS was first announced by the CBN on October 3, 2024, as part of a series of reforms aimed at addressing speculation and enhancing transparency in Nigeria’s foreign exchange market. This system was specifically designed for authorised dealers operating within the Nigerian Foreign Exchange Market (NFEM) and became operational on December 2, 2024, after a successful two-week trial period conducted in November.

The EFEMS platform is a fully electronic system that provides real-time pricing and visibility of buy and sell orders. By automating the matching of orders, it ensures that transactions occur at the most competitive prices available, significantly reducing the chances of price manipulation and other market distortions.