CBN Sets $100,000 Minimum Trade Value for Interbank Forex Transactions
By Matthew Eloyi
The Central Bank of Nigeria (CBN) has introduced a $100,000 minimum trade value for interbank foreign exchange (FX) trading through the Electronic Foreign Exchange Matching System (EFEMS).
The directive, dated November 25, 2024, and signed by the CBN’s Director of the Financial Markets Department, Dr. Omolara Duke, aims to enhance transparency, efficiency, and compliance in the FX market.
“The minimum tradable amount is US$100,000.00, with incremental clip sizes of US$50,000.00,” the CBN stated.
The guidelines also specify that participants must adhere to credit and settlement limits, with transactions exceeding these limits requiring prior resolution.
Bloomberg’s BMatch platform has been designated as the official order-matching system for interbank transactions, with trading hours set between 9:00 am and 4:00 pm West Africa Time on business days.
The EFEMS will initially support only spot FX transactions involving the Nigerian naira and the United States dollar. However, the CBN retains the discretion to introduce other currency pairs as necessary.
“All trades consummated on EFEMS are binding unless canceled by mutual agreement of both parties with written approval from the CBN,” the directive read.
Participation is limited to authorised dealer banks licensed by the CBN, with other institutions required to seek prior approval. Participants must also comply with the Nigerian Foreign Exchange Code and other CBN regulations.
The guidelines stipulate that withdrawal from the EFEMS platform must be preceded by a 30-day notice, along with the resolution of any outstanding obligations.
Additionally, all trades conducted via the platform will remain anonymous until matched, with counterparty details revealed only after transaction completion.
The CBN emphasised the importance of reporting and market surveillance, requiring participants to log any transactions exceeding set limits within 10 minutes on the FX blotter. Participants must also submit daily reports detailing trade volumes, settlement statuses, and counterparties to ensure transparency and market integrity.
By implementing these measures, the CBN aims to streamline interbank FX trading, reduce counterparty risks, and maintain robust oversight of Nigeria’s foreign exchange market.