The transparency in the Central Bank of Nigeria’s new Electronic Foreign Exchange Matching System (EFEMS) has made currency speculators and illegal market operators source FX elsewhere.
The development has pushed the demand for the naira in the parallel market.
Currency speculators dump dollars in the black market
Apart from illegal traders, legitimate buyers who cannot meet the new platform’s requirements have also opted for the parallel market, aiding the value of the local currency.
Analysts say most people with no business in the official market now patronise the parallel market, explaining the rising demand in the black market.
They say fraudsters, Ponzi scheme operators and illicit traders patronise the parallel market instead of the newly introduced EFEMS.
Legit.ng earlier reported that the CBN directed commercial banks to adopt the Bloomberg BMatch system trading system.
The new platform became operational on December 2, 2024, aiming to boost transparency and operational efficiency in Nigeria’s Forex market.
The apex bank issued guidelines via EFEMS for the interbank FX market trading system operations. It pegged the minimum tradable amount at $10,000 to enhance transparency and efficiency in the market.
CBN’s director of the financial markets department, Omolara Duke, disclosed this in a circular to all the banks.
The circular said the EFEMS initiative will ensure transparent, fair and efficient FX trading, reduce risks, and enforce compliance with CBN regulators.
Naira gains against the dollar
According to reports, the naira has gained about N147.69 since introducing the EFEMS.
The Nigerian currency rose to N1,515 per dollar in the parallel market on Friday, December 6, 2024, as traders sold dollars in response to the new guideline, recording a five-day winning streak.
The naira appreciated 0.85% or N13 as the dollar sold for N1,545 on the EFEMS.
Data from CBN showed that the naira traded at N1,680 per dollar on Thursday, December 12, 2024, relative to N1,715 recorded on Wednesday, December 11, 2024, due to moderate demands in the black market
CBN releases new exchange rate
Legit earlier reported that the naira rose in value in the official and parallel markets as dollar demands declined
Information from the CBN showed that the naira rose 0.85%, gaining 13 in the EFEMS.
The dollar was quoted at N1,532 on Thursday, December 12, 2024, compared to N1,545 it traded the day before.
