The naira has witnessed a notable recovery, appreciating by N125 against the dollar within a month following the implementation of the Electronic Foreign Exchange Matching System (EFEMS).

This development, which marks a significant shift in Nigeria’s foreign exchange market, was confirmed by data from the Central Bank of Nigeria (CBN).

According to the CBN, the naira strengthened by 8 percent as the dollar was quoted at N1,535 on January 3, 2025, compared to N1,660 quoted on December 2, 2024, the official launch date of EFEMS trading.

The introduction of EFEMS was first announced by the CBN on October 3, 2024, as part of a series of reforms aimed at addressing speculation and enhancing transparency in Nigeria’s foreign exchange market. This system was specifically designed for authorised dealers operating within the Nigerian Foreign Exchange Market (NFEM) and became operational on December 2, 2024, after a successful two-week trial period conducted in November.

The EFEMS platform is a fully electronic system that provides real-time pricing and visibility of buy and sell orders. By automating the matching of orders, it ensures that transactions occur at the most competitive prices available, significantly reducing the chances of price manipulation and other market distortions.

Furthermore, the system curtails speculative trading and mitigates the volatility often caused by such distortions. It also improves regulatory oversight, offering enhanced monitoring capabilities for FX activities and ensuring that all trades are conducted within a transparent and well-regulated framework.

Before the introduction of EFEMS, Nigeria’s foreign exchange market relied on manual or semi-automated trading processes, which were prone to inefficiencies and potential manipulation. The new system eliminates these challenges by centralising transactions on a single regulated platform and ensuring real-time visibility and seamless processing. This marks a shift towards a more transparent and efficient foreign exchange trading environment.

Olayemi Cardoso, the governor of the CBN, highlighted the significance of this reform, stating, “Over the past year, we have undertaken critical reforms to unify Nigeria’s exchange rate, eliminating distortions and restoring transparency. This unification has enabled us to clear the outstanding foreign exchange obligations, giving businesses—ranging from manufacturers to airlines—the confidence to plan and invest in the future. To further enhance the functionality of the foreign exchange market, we are introducing an electronic FX matching system, which has proven effective in other markets.”

While EFEMS has delivered promising results, industry experts stress that challenges remain. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), acknowledged the CBN’s progress in stabilising the foreign exchange market but pointed out that the unregulated black market continues to pose significant hurdles. “The measures taken by the CBN are yielding some positive results, but it is a work in progress,” Yusuf explained. “Speculators and manipulators in the market are constantly devising new tricks, so this must be a continuous effort.”

The naira’s recent appreciation comes after a turbulent year marked by significant instability. In 2024, the currency experienced a sharp depreciation, losing 40.9 percent of its value against the dollar in the official market, despite an increase in external reserves. This decline underscored the persistent challenges facing Nigeria’s currency market, even amid efforts to stabilise the economy.

The EFEMS initiative, while still in its early stages, represents a critical step toward addressing these challenges. Its potential to reduce market distortions, improve transparency, and restore investor confidence could play a pivotal role in ensuring long-term stability in Nigeria’s foreign exchange market.

Source: https://businessday.ng/news/article/naira-appreciates-by-n125-one-month-after-efems-launch/

Good

Slow and steady

Where are those shouting "it is because people are coming back cos of the festive period and everything will go back to normal in January"

It needs more appreciation.

richmond500:
Where are those shouting it is because of the festive period and everything will go back to normal in January

Don't be in a hurry.

We are still in the festive season, and during this period, Diaspora remittances are at an all-time high.

We want this Naira appreciation to be sustained. If possible, it should continue to appreciate to the level it was at when this current government took office in May 2023.

What we are against is the use of lies, falsehoods, and propaganda to celebrate an imaginary and abracadabra Naira appreciation that is not sustained.

We will know the true state of naira by the end of January

Kaycee9242:
We will know the true state of naira by the end of January

it's not January again, it's now the end?

Bobloco:


Don't be in a hurry.

We are still in the festive season, and during this period, Diaspora remittances are at an all-time high.

We want this Naira appreciation to be sustained. If possible, it should continue to appreciate to the level it was at when this current government took office in May 2023.

What we are against is the use of lies, falsehoods, and propaganda to celebrate an imaginary and abracadabra Naira appreciation that is not sustained.

Quick mouth changing. Typical of you guys

Before today ends, it will depreciate, nothing is stable, everything is jerking like the hand of the Iragbiji drunk.

MadamVanessa:




Before today ends, it will depreciate, nothing is stable, everything is jerking like the hand of the Iragbiji drunk.

And if did not depreciate, what should we do to you?

MadamVanessa:




Before today ends, it will depreciate, nothing is stable, everything is jerking like the hand of the Iragbiji drunk.

It has even appreciated this morning

I know it is paining some people and keep buying dollars, you will see shege this year

Even some of us that live and make our living in the Diaspora have been investing in Nigerian stocks and bonds

I laugh in Swahili

Lol. Check back in March...

yoruboid:


It has even appreciated this morning

I know it is paining some people and keep buying dollars, you will see shege this year

Even some of us that live and make our living in the Diaspora have been investing in Nigerian stocks and bonds

Appreciate to what zone B
Dollar is still 1640 out there. You people should stop celebrating nonsense

Nigerians are celebrating that $1 is equal to 1500k.

Shame on all of you!

Paid bots fighting for their pay.

You produce nothing, import everything and you want naira to be as strong as iya basira ManPower mixtures.


I think the defenders of this absurdity need their heads checked.

Wait for business activities to pick up in a week time and see naira fall like Faleela's fall b00bs 😎

Forcing Naira to appreciate is not a lasting solution since it can crash one day.

Let it appreciate to N700

They must stop the annoying hawking of dollars on streets ,it is money laudering

It is 1660 at black market rate as we speak.