CBN Makes Changes to Forex Trading, Announces New Minimum Requirement
- A minimum deal size of $100,000 is now required by CBN for interbank foreign exchange trading using the EFEMS
- This is an effort to guarantee Nigeria's foreign exchange market's effectiveness, transparency, and compliance
- A notable provision of the regulations calls for a minimum marketable amount of $100,000, with increasing clip sizes of $50,000
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
The Central Bank of Nigeria has issued new guidelines requiring interbank foreign exchange trading using the Electronic Foreign Exchange Matching System to have a minimum trade size of $100,000.
Source: UGC
This is in an attempt to ensure efficiency, transparency, and compliance in Nigeria's foreign exchange market.
The guideline was signed by Dr. Omolara Duke, director of the CBN's financial markets department, on November 25, 2024.
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According to a new set of recommendations issued by the CBN on Tuesday, the EFEMS is intended to simplify interbank foreign exchange trading, lower counterparty risks, and guarantee compliance with CBN regulations.
New official order-matching tool
The apex bank has also designated Bloomberg's BMatch as the official order-matching tool for interbank transactions. On business days, trading hours are established from 9 am to 4 pm 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 canceled 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.
CBN extends recapitalisation deadline for BDC operators
Legit.ng earlier reported that the deadline for recapitalizing Bureau of De Change (BDC) operators was moved from December 3, 2024, to June 3, 2025, by the Central Bank of Nigeria (CBN).
Aminu Gwadabe, president of the Association of Bureaux De Change Operators of Nigeria (ABCON), said this during a virtual emergency meeting attended by ABCON members.
Gwadabe clarified that the apex bank extended the deadline by six months due to operators' poor adherence to the recapitalization rules.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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