CBN Mandates Access, Zenith, UBA, Others to Move to New FX Trading Platform, Gives Commence Date
- The Central Bank of Nigeria has mandated all banks operating in the interbank FX market to move to the Bloomberg BMatch system
- The bank stated that the move aims to boost efficiency and transparency in the foreign exchange market
- Also, the apex bank issued new guidelines requiring a minimum trade size of $100,000 for interbank FX exchange trading using the EFEMS.
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Central Bank of Nigeria (CBN) issued a directive on Tuesday, November 26, 2024, mandating all banks in the interbank FX market to move to the Bloomberg BMatch system for forex trading.
The apex bank said the implementation will begin on December 2, 2024, and is designed to boost operational efficiency and transparency of Nigeria’s forex system.
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CBN reveals the purpose of the new platform
In the circular seen by Legit.ng, CBN said the BMatch platform provides an automated system for matching trades, boosting market integrity and facilitating better price discovery.
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CBN said:
“This initiative is a significant step toward improving uniformity in trading and ensuring seamless operations among market participants,” Omolara Duke, director of the financial markets department at the CBN, said in a circular to all banks.
According to the financial institution’s regulator, banks are advised to begin steps to acquire the necessary technology to integrate with the new platform, train employees to operate the platform, and abide by all operational guidelines and standards associated with the system.
CBN threatens sanctions
According to experts, the directive highlights the significance of collaboration between banks and Bloomberg representatives to hasten onboarding and resolve any possible technical challenges.
The statement signed by CBN’s Director of Financial Markets Department, Omolara Duke, states that banks must act quickly to align with the new system, saying the directive is beyond compliance but elevating the FX trading standards in Nigeria.
CBN also stressed its regulatory powers to enforce the directing, threatening to sanction erring banks that fail to comply with the new guidelines.
The enforcement aims to ensure the smooth adoption of the new system and upholds CBN’s commitment to boosting the transparent FX market.
The new directive shifts Nigeria’s FX trading terrain, showing CBN’s focus on using technology to boost market performance and reliability.
CBN pegs FX amount in EFEMS
Similarly, CBN issued new guidelines requiring interbank foreign exchange trading using the Electronic Foreign Exchange Matching System to have a minimum trade size of $100,000.
This ensures 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.
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.
CBN clarifies converting forex in domiciliary to naira
Legit.ng earlier reported that the Central Bank of Nigeria (CBN) has issued new rules clarifying that commercial, merchant, and non-interest banks (CMNIBs) should let holders convert their internationally tradable foreign currency (ITTC) balances in designated domiciliary accounts into the local currency, the naira, at any time, using the prevailing exchange rate.
The bank disclosed that all conversions must be fully disclosed and reported as part of the bank’s exchange rate requirements.
Legit.ng reported that in February 2024, the apex bank reaffirmed that it would not coerce domiciliary account holders to convert their holdings into naira.
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Source: Legit.ng
