The Central Bank of Nigeria (CBN) has unveiled the Nigeria Foreign Exchange (FX) Code on Monday, January 27, 2025, coinciding with a rise in the value of the Naira against the US dollar at the black market.
The CBN explained in a statement that the release of the FX Code was designed to address risks emerging from recent positive changes in the country’s financial landscape.
Drawing on global best practices and the Global FX Code, the new guidelines aim to enhance the integrity and effectiveness of Nigeria’s wholesale foreign exchange market.
The CBN stated: “Over the years, the Nigerian financial landscape has undergone considerable and positive transformation. Nonetheless, some risks are apparent. The FX Code was in response to these developments to set out standards to holistically strengthen and promote the integrity and effective functioning of the wholesale foreign exchange market in Nigeria.”
The FX Code, according to the CBN, will promote a fair, liquid, open, and transparent market, allowing market participants to trade effectively and competitively while adhering to global standards.
The new Code applies to all market participants, including authorized dealers licensed by the CBN under the CBN Act 2007, the Bank and Other Financial Institutions Act (BOFIA) 2020, and other entities engaged in wholesale foreign exchange transactions in Nigeria.
The FX Code is based on six guiding principles: ethics, governance, execution, information sharing, risk management, compliance, and confirmation and settlement processes.
The CBN emphasized that the Code also incorporates principles aimed at improving market efficiency, including measures to prevent illegal financial transfers and ensure robust anti-money laundering policies.
“The FX Code requires market participants to ensure that illegal financial transfers are avoided and appropriate money laundering policies are put in place to protect the integrity of the domestic markets and the global financial framework as a whole,” the CBN added.
Following the release of the FX Code, the Naira appreciated by N10 against the dollar at the black market, marking an immediate response to the new guidelines.
