Economy

CBN introduces electronic FX matching system for transactions

Published

2 weeks ago

October 4, 2024

In a major shift aimed at reforming the Nigerian Foreign Exchange Market (NFEM), the Central Bank of Nigeria (CBN) has announced the introduction of the Electronic Foreign Exchange Matching System (EFEMS) for foreign exchange (FX) transactions.

This digital platform is expected to improve the governance and transparency of the interbank FX market with full implementation set for December 1, 2024.

In a circular addressed to Authorised Dealers on Thursday, Dr. Omolara O. Duke, the Director of the CBN’s Financial Markets Department, outlined the details of the system.

According to the circular, a two-week test run of the EFEMS will be conducted in November 2024 before the official launch in December.

The test run aims to ensure that Authorised Dealers and relevant market participants are familiar with the system and that all technical aspects are fully integrated before going live.

Once operational, all FX transactions in the interbank market will be conducted on this electronic system, which has been approved by the CBN.

Transactions will be reflected immediately in real time, providing better transparency to market participants.

The system is also expected to reduce speculative activities that often distort the market and give the CBN improved oversight to regulate the market effectively.

The new EFEMS is poised to enhance the governance of the Nigerian FX market as the CBN has framed EFEMS as a tool that will improve transparency, thereby fostering a market-driven exchange rate.

In her statement, Dr. Duke emphasised the system would “facilitate a market-driven exchange rate that will be accessible to the public.”

By publishing real-time prices and buy/sell orders data, EFEMS will make it easier for market participants, including businesses and individuals, to access reliable information on FX rates. This development is expected to address the lack of transparency that has plagued the FX market, leading to more informed decision-making by market players. In addition, it will allow the CBN to have an enhanced supervisory role, as the system will provide improved monitoring capabilities.

The introduction of EFEMS comes as part of the CBN’s broader effort to curb speculative activities that often distort the true value of the Nigerian naira. Speculation in the FX market has led to significant volatility, contributing to a widening gap between the official and parallel market rates. By introducing a system that ensures real-time transparency, the CBN hopes to limit the ability of speculators to manipulate market prices for personal gain.

The EFEMS will also work toward eliminating market distortions by streamlining the FX transaction process. As all transactions will be conducted electronically, the risk of delays or discrepancies between quoted rates and actual transaction prices will be significantly reduced.

In order to ensure a smooth rollout of the EFEMS, the CBN has partnered with the Financial Markets Dealers Association (FMDA).

Together, they will publish the operating rules for the EFEMS, which will guide the market participants in conducting FX transactions. In addition, the Nigerian FX Code and revised Market Operating Guidelines for the NFEM will provide further guidance to market participants, ensuring adherence to the highest standards of practice.

The FMDA will also play a key role in ensuring that Authorised Dealers comply with the operational requirements of the new system. This includes ensuring that the necessary documentation, training, and system integrations are completed ahead of the December 1st go-live date.

The CBN’s directive places significant responsibility on Authorised Dealers, who are required to comply with all existing guidelines and regulations governing the NFEM. As part of their obligations, they must ensure that their systems are fully integrated with the EFEMS platform before the implementation date.

Dealers are also mandated to complete training on the use of the EFEMS to ensure that all market participants are well-prepared for the transition. This move is critical in preventing any operational disruptions during the switchover to the new system.

The introduction of EFEMS comes at a time when the Nigerian economy is facing significant currency pressures due to external and internal factors. The CBN’s initiative is expected to provide stability to the Nigerian naira by curbing market speculation, which has contributed to exchange rate volatility.

With enhanced transparency and real-time access to FX market data, businesses will be better equipped to plan and manage their foreign exchange needs, reducing the uncertainty that has been a hallmark of the Nigerian FX market in recent years. Furthermore, the public will have greater access to FX market information, enabling individuals and businesses to make more informed decisions.

By implementing EFEMS, the CBN aims to create a more efficient and transparent market that aligns with global best practices. If successful, the system could serve as a model for other emerging markets grappling with similar challenges in their FX markets.

Economy

SEE NAIRA Rates Against The USD, GBP, EURO Today October 15, 2024

Published

1 day ago

October 15, 2024

Naijablitznews

By Mario Deepromoter

WHEN we look at this month, USD was traded at ₦1690 at the beginning of this October on Tuesday, October 1, 2024. As at today with USD being traded at ₦1,699 we see a -16.89% decline for United States Dollar to Naira exchange rate for this month.

On this page, we are primarily focusing on the Black Market Dollar To Naira Exchange Rate Today, the USD to Naira currency pair are the most traded currency in the FX market.

Black Market Exchange Rates
Buying Rate
Selling Rate
Dollar to Naira 1699 1688
Pounds to Naira 2252 2217
Euro to Naira 1854 1830
Canadian Dollar to Naira 1231 1223
Rand to Naira 52 43
Dirham to Naira ‎0 0
Yuan to Naira 62 62
G.Cedi to Nair 70 50
CFA F. (XOF) To Naira 0.83 0.81
CFA F. (XAF) To Naira 0.74 0.74

Having full knowledge how much USD to NGN black market exchange rate today will give you a better opportunity to plan and make informed decisions.

Nairatoday com

Economy

Naira Sinks to New Low in Parallel Market

Published

1 day ago

October 15, 2024

Kayode Sanni-Arewa

The Nigerian naira has tumbled to an unprecedented low, trading at N1,700 per dollar in the parallel market on October 14, 2024. This marks a 0.29% decline from its previous rate of N1,695/$1 recorded just days earlier, despite a surge in crude oil prices, which have now surpassed $80 per barrel.

While the parallel market saw a significant drop, the naira remained relatively stable in the official Investors and Exporters (I&E) window, closing at N1,641.27/$1. However, this still represents a 1.14% depreciation from its earlier rate of N1,622.57/$1.

The growing disparity between the official exchange rate and the parallel market continues to expose the pressure on Nigeria’s foreign exchange system.

The naira has experienced a steep decline throughout 2024, losing over 50% of its value since January, when it traded at N907.11/$1. By October, the currency had crossed the N1,500/$1 threshold. After a temporary recovery in March to N1,303/$1, the currency has been on a consistent downward slide.

Key Data Points:
Parallel market rate: Naira dropped to N1,700 per dollar on October 14.
I&E window: Closed at N1,641.27/$1, marking a 1.15% drop from N1,622.57/$1.
Trading volume: Surged to $616.73 million, indicating rising demand for dollars.

Despite global oil prices climbing above $80 per barrel, the naira continues to weaken, largely due to a persistent shortage of dollars, inflationary pressures, and reliance on the parallel market. While higher oil prices would typically provide relief for oildependent economies, Nigeria’s foreign exchange system remains under strain.

Though the naira’s breach of N1,700/$1 is concerning, there is hope for a shortterm rebound. Rising oil prices and new economic policies aimed at curbing demand for foreign exchange may help stabilize the currency, with a potential return to the N1,600/$1 range. However, the broader economic environment, including inflation and forex supply, will determine the naira’s future trajectory.

Economy

No cause for alarm as FG adopts 88 international standards for CNG vehicle safety

Published

2 days ago

October 14, 2024

Kayode Sanni-Arewa

The Federal Government says it has adopted 88 international standards for Compressed Natural Gas products to bolster the ongoing rollout of various CNG initiatives across the country.

It said this procedure will ensure a smooth implementation of CNG systems in vehicles and to ensure the use of quality products in Nigeria.

The Director-General, Standard Organisation of Nigeria, Dr Ifeanyi Okeke, disclosed this in a statement issued on Sunday to commemorate the World Standards Day celebration in Abuja.

The annual celebration is themed, “Our Shared Vision for a Better World: Standards for Changing the Climate.”

Okeke said the event was aimed at raising awareness about the impact of standards on industrialisation and economic growth.

Recently, there have been growing concerns regarding the conversion of fossil fuel-powered vehicles to CNG vehicles, particularly about the risks of explosions and other safety hazards associated with the use of CNG as a fuel source.

These apprehensions stem from reports of incidents where improperly installed or maintained CNG systems have led to dangerous situations, raising questions about the adequacy of safety regulations and the need for more rigorous oversight.

But reacting, the SON DG said the government adopted international standards to ensure that CNG products meet rigorous safety and quality benchmarks, ultimately supporting the broader transition to sustainable energy solutions.

He said, “Standards are crucial in achieving these goals and in facilitating the development of renewable energy; energy efficiency and sustainable practices.

“The SON, in line with President Bola Ahmed Tinubu’s agenda, has adopted 88 international standards for Compressed Natural Gas products to support the success of CNG initiatives.

“Additionally, the SON is a member of the committee developing the Natural Gas Vehicles Monitoring System, aimed at overseeing the implementation of CNG systems in vehicles and to ensure the use of quality products in Nigeria.”

The SON boss said the organisation has also conducted factory visits to China and India to certify CNG components in its quest for safety and quality assurance.

“As we navigate the challenges of climate change, we must acknowledge that standards are vital for the successful implementation of mitigation strategies.

“Let me assure you that SON is dedicated to improving life through standardisation and quality assurance, fostering consumer confidence, and enhancing the global competitiveness of Made-in-Nigeria products.

“Through global collaboration, Standards bodies around the world align their activities with the Sustainable Development Goals for peace, prosperity and the welfare of people and the planet. International standards offer practical solutions which we must all identify with to become part of the solution since they are the backbone of global progress,” the statement concluded.