The Central Bank of Nigeria has given latest guidelines that requires interbank foreign exchange trading using the Electronic Foreign Exchange Matching System (EFEMS) to have a minimum trade size of $100,000.

Only spot foreign exchange transactions which involves the US dollar and the Nigerian naira will be handled by the EFEMS.

This is a move that has been made to ensure efficiency, transparency, and compliance in Nigeria's foreign exchange market.

Dr Omolara Duke, director of the CBN's financial markets department, signed the guideline on November 25, 2024.

The EFEMS is intended to make easier interbank foreign exchange trading, lower counterparty risks, and guarantee compliance with CBN regulations.

The Central Bank has also designated Bloomberg's BMatch as the official order-matching tool for interbank transactions.

On business days, trading hours are set from 9am to 4pm West African Time. The restrictions include a noteworthy clause requiring a minimum tradable quantity of $100,000, with escalating clip sizes of $50,000.

Additionally, the EFEMS handles only spot foreign exchange transactions involving the US dollar and the Nigerian naira. However, if it feels essential, the CBN is still free to introduce new currency pairs.

The guidelines document read, “All trades consummated on EFEMS are binding unless cancelled by mutual agreement of both parties with written approval from the CBN.

“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.”

Only CBN-licensed authorized dealer banks are permitted to participate in the EFEMS; other institutions that want to join the platform must first receive prior approval.

Additionally, participants must maintain correct profiles, enter into agreements with the CBN-approved platform provider, and stay under the established credit and settlement limits.