The Central Bank of Nigeria (CBN) has officially approved the release of the Nigerian Foreign Exchange (FX) Code, a move aimed at fostering ethical conduct and transparency within the nation’s foreign exchange market.
In a statement on the apex bank’s website, it disclosed that the Code, which will serve as a vital guideline for the banking industry, is designed to ensure that authorised dealers uphold the highest standards of professionalism and integrity when conducting FX transactions.
The CBN emphasized that the introduction of the FX Code is part of its ongoing efforts to enhance the stability and integrity of Nigeria’s FX market.
The Code will offer clear directives on the expectations for market participants, ensuring that the market operates in a fair and transparent manner.
This step is particularly significant as the Nigerian FX market has experienced volatility in recent years, with issues such as currency devaluation and irregularities in FX transactions affecting both investors and businesses.
“The Central Bank of Nigeria has approved the release of the Nigerian Foreign Exchange (FX) Code as a guideline to the banking industry to promote ethical conduct of Authorised Dealers in the Nigerian Foreign Exchange Market,”, the bank said.
FX code to be launched on January 28
The CBN has also announced that the formal launch of the FX Code will take place on Tuesday, January 28, 2025, at the CBN Head Office Auditorium in Abuja.
This event is expected to be attended by key stakeholders in the banking and financial sectors, as well as representatives from regulatory bodies.
“The Bank will formally launch the Code at the CBN Head Office Auditorium, Abuja, on Tuesday, January 28, 2025,” the statement said.
- By introducing this comprehensive set of guidelines, the CBN seeks to enhance the trust and confidence of both domestic and international investors in Nigeria’s FX market.
- This move, analysts say, aligns with the bank’s broader strategy to ensure that the nation’s financial systems remain robust and resilient in the face of global economic challenges. It is also anticipated that the FX Code will contribute to the long-term sustainability and competitiveness of Nigeria’s economy.
- The successful implementation of the FX Code is expected to improve Nigeria’s standing as an investment destination, attracting further foreign capital inflows and reducing the uncertainties surrounding the FX market.
As the CBN prepares to launch the Code, market participants are encouraged to familiarize themselves with the guidelines to ensure compliance and support the country’s efforts toward economic stability.
What you should know
- In August 2024, CBN auctioned $876.26m to end users whose bids were submitted by 26 commercial banks in the apex bank’s latest attempt to strengthen the ailing naira.
- The bank also launched an Electronic Foreign Exchange Matching System (EFEMS) launch for Foreign Exchange (FX) transactions in the Nigerian Foreign Exchange Market (NFEM).
