Naira gains N147 as new CBN platform boosts FX, experts explain reason Nexovant
- The newly introduced Electronic Foreign Exchange Matching System (EFEMS) has further pushed up the naira’s value
- The development has led illegal currency traders to source for FX in the parallel market, causing the currency to improve
- Available data showed that the naira has gained over N147 against the US dollar in the parallel market over the last 14 days
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Transparency in the new Electronic Foreign Exchange Matching System (EFEMS) has resulted in the naira’s continued demand in the parallel market.
The system by the Central Bank of Nigeria (CBN) has reportedly caused currency speculators and illegal market operators to source FX elsewhere.
Analysts explain how the Central Bank of Nigeria’s new EFEMS is aiding the naira’s recovery. Credit: Bloomberg/Contributor
Source: Getty Images
Currency speculators dump dollars in black market
Apart from illegal traders, legitimate buyers who cannot meet the new platform’s requirements have seemingly also opted for the parallel market, aiding the value of the local currency.
Read also
New exchange rate: Naira appreciates against US dollar in forex markets
Analysts said most people with no business in the official market now made use of the parallel market, with fraudsters, Ponzi scheme operators, and illicit traders avoiding the EFEMS.
Legit.ng earlier reported that the CBN directed commercial banks to adopt the Bloomberg BMatch system trading system, a new platform that became operational on December 2, 2024.
The apex bank issued guidelines via EFEMS for the interbank FX market trading system and also set the minimum tradable amount at $10,000 to enhance efficiency and transparency.
CBN’s Director of Financial Markets, Omolara Duke, said in a circular that the EFEMS would ensure transparent, fair and efficient FX trading, reduce risks, and enforce regulatory compliance.
Naira gains against the dollar
Meanwhile, according to recent reports, the naira has gained about N147.69 since the introduction of the EFEMS.
The currency rose to N1,515 per dollar in the parallel market on December 6, 2024, as traders sold off dollars.
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Recording a five-day winning streak, the naira appreciated 0.85% or N13 as the dollar sold for N1,545 on the EFEMS.
CBN data showed that the naira traded at N1,680/dollar on December 12, 2024, due to moderate black market demands.
CBN releases new exchange rate
Legit.ng also reported that the naira’s value rose in official and parallel markets as dollar demands declined.
Information from the CBN showed that the Nigerian currency rose 0.85%, recording a gain of 13 in the EFEMS.
The dollar was quoted at N1,532 on December 12, 2024, compared to N1,545 it had traded at a day before.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
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