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The Central Bank of Nigeria’s Electronic Foreign Exchange Matching System (EFEMS) has strengthened the naira to N1,587.29/$1 in the official market, driving market transparency and efficiency. Launched in December 2024, EFEMS aims to unify exchange rates, reduce risks, and attract foreign investment.

The launch of the Electronic Foreign Exchange Matching System (EFEMS) by the Central Bank of Nigeria (CBN) has led to a significant strengthening of the naira, with rates improving to N1,587.29/$1 in the official market and N1,640 in the parallel market. The platform, introduced on December 2, 2024, aims to enhance transparency and market efficiency by allowing foreign exchange transactions between the naira and the U.S. dollar. EFEMS has been praised by analysts for helping to eliminate market distortions and improving price discovery in Nigeria's volatile FX market.

Since its launch, the naira has shown consistent gains, with rates at the parallel market dropping from N1,745 to N1,640 in just a few days. EFEMS is expected to play a vital role in reducing counterparty risks and ensuring market discipline, as it operates through Bloomberg's BMatch system and requires a minimum trade size of $100,000. The system also helps integrate trade data for greater oversight and transparency.

Governor Olayemi Cardoso highlighted that EFEMS is part of a broader reform to unify Nigeria's exchange rates, restore confidence, and attract foreign investments. Analysts predict that the system will aid in stabilizing the FX market and lead to a modest appreciation of the naira in 2025. The system has been lauded as a crucial step toward creating a more transparent, efficient, and market-driven FX market in Nigeria.