The Naira continued to gain ground in the black market as it entered the N1,600 per Dollar territory, following ease to trading mechanism with the launch of the Electronic Foreign Exchange Matching System (EFEMS).
The Naira gained N34 to trade at N1,686 per Dollar on Thursday, December 5.
The street value had also appreciated to N1,720 at the preceding session on Wednesday.
On the Central Bank of Nigeria (CBN) website, the Naira traded at N1,613 per Dollar, reflecting the minimum rate that it would auction FX to authorised dealers.
The EFEMS platform, which began operations this week, is expected to instantly reflect data on all FX transactions conducted in the interbank market and approved by the apex bank.
The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including an expected rebound in the value of the Naira across markets.
The central bank also said it would publish real-time prices and buy-sell orders data from this system. This transparency will help eliminate sharp practices that are rife in the system.
The Governor of the CBN, Olayemi Cardoso, also said the electronic FX matching system is part of broader efforts by the bank to unify Nigeria’s exchange rate and eliminate market distortions.
“The introduction of the FX matching system will enable the Central Bank to monitor the market more effectively and intervene where necessary. This will significantly improve transparency and provide a more accurate reflection of the Naira’s value,” Cardoso stated.
The appreciation in the local currency aligns with analysts expectations that the exchange rate will pick up in the last quarter of the year and strengthen into 2025.