CBN Releases FX Code To Strengthen Ethical Standards In Nigeria’s Foreign Exchange Market

The Central Bank of Nigeria (CBN) approves the Nigerian Foreign Exchange (FX) Code, a regulatory framework aimed at promoting ethical conduct, transparency, and stability in the country’s FX market.

According to an official statement, the FX Code serves as a guideline for authorised dealers, ensuring they maintain the highest standards of professionalism and integrity in foreign exchange transactions.

The CBN emphasizes that the FX Code is part of ongoing efforts to improve market operations and build confidence in Nigeria’s FX ecosystem. It provides clear directives for market participants, ensuring a fair and transparent trading environment.

This initiative comes as Nigeria’s FX market faces challenges, including currency fluctuations and irregular trading practices that impact businesses and investors.

The official launch of the FX Code takes place on Tuesday, January 28, 2025, at the CBN Head Office Auditorium in Abuja. The event will bring together key players in the financial sector, including representatives from regulatory bodies and banking institutions.

The CBN states that this initiative aims to:

• Boost investor confidence by ensuring ethical FX trading practices.
• Strengthen Nigeria’s financial system amid global economic challenges.
• Improve Nigeria’s attractiveness as an investment destination by fostering a more stable FX market.

The FX Code aligns with other recent measures by the CBN to enhance Nigeria’s foreign exchange system:

• In August 2024, the CBN auctions $876.26 million to end-users through 26 commercial banks to support the naira and reduce FX volatility.
• The Electronic Foreign Exchange Matching System (EFEMS) launches to enhance transparency in FX transactions.

As the FX Code launch approaches, the CBN urges banks and market participants to familiarize themselves with the new guidelines, ensuring full compliance and contributing to Nigeria’s economic stability.