The Central Bank of Nigeria (CBN) has mandated banks in the interbank foreign exchange market to transition to the Bloomberg BMatch trading platform, leading to promising outcomes.
After enduring severe depreciation in recent months, the Naira has made a notable recovery in both official and parallel markets.
On Friday, the Naira closed at N1,515 to the dollar in the parallel market, marking a 2.08 percent appreciation from the previous day.
This represents a substantial improvement from its low of N1,755 per dollar on November 21, 2024, just before the new FX policy took effect.
The currency’s impressive 18.8 percent recovery in the black market—equivalent to N240—has been attributed to traders offloading dollars in response to the CBN’s new framework.
At the official market, the Naira also strengthened, appreciating by 2.08 percent, or N32, to close at N1,535 to the dollar on Friday.
This is an enhancement from Thursday’s closing rate of N1,567, according to data from the Nigerian Foreign Exchange Market (NFEM).
According to TheNation, since the Bloomberg BMatch system became operational on December 2, 2024, the Naira has strengthened by 8.97 percent, or N137.69, compared to its closing rate of N1,672.69 on November 29.
The Bloomberg BMatch system is an automated trade-matching platform designed to increase transparency and efficiency in the FX market.
Launched on December 2, 2024, the platform facilitates seamless trading and standardization among participants, addressing long-standing issues of market opacity and inefficiency.
Omolara Duke, Director of the Financial Markets Department at the CBN, remarked that the Bloomberg BMatch platform is a transformative tool for the FX market.
“This initiative signifies a major advancement in ensuring consistency and streamlined operations among market participants,” she noted in a circular directed at banks.
The CBN also recently issued detailed guidelines for the interbank FX trading system under the Electronic Foreign Exchange Matching System (EFEMS), establishing a minimum tradable amount of $100,000, with incremental clip sizes of $50,000 to promote greater transparency and efficiency.
The recent recovery of the Naira underscores the effectiveness of the CBN’s strategic interventions in the FX market. Analysts attribute the improved price discovery mechanism facilitated by the Bloomberg BMatch platform as a key driver of increased confidence among market participants.
Traders have responded positively to the automated system, which diminishes pricing discrepancies and enhances liquidity.
This reduction in speculative trading has significantly contributed to the stabilization of the Naira in both official and unofficial markets.
The CBN’s mandate for the Bloomberg BMatch system is part of broader efforts to overhaul Nigeria’s FX market and enhance its integrity.
Previously, the market was plagued by volatility and inefficiencies, resulting in significant disparities between official and parallel market rates.
The CBN is optimistic about the platform’s potential to maintain the Naira’s recovery. By fostering transparency and encouraging greater market discipline, the central bank aims to establish Nigeria’s FX market as a model of efficiency in the region.
While the current gains are encouraging, financial experts warn that sustained recovery will depend on consistent policy implementation, adequate FX supply, and effective regulation to mitigate market distortions.
As the Bloomberg BMatch platform continues to gain traction, the Naira’s recovery marks a positive shift for Nigeria’s FX market.
The CBN’s commitment to innovative solutions and stringent regulatory measures highlights a renewed focus on stability and investor confidence.
