CBN Unveils New Foreign Exchange Code to Enhance Market Integrity and Transparency

The Central Bank of Nigeria (CBN) has officially approved the release of the Nigerian Foreign Exchange (FX) Code, a significant step aimed at fostering ethical conduct and transparency in the country’s foreign exchange market. The apex bank announced that the Code will be formally launched on Tuesday, January 28, 2025, at the CBN Head Office Auditorium in Abuja. According to the CBN, this initiative is part of its ongoing efforts to enhance the stability and integrity of Nigeria’s FX market.

In a statement, the CBN explained that the FX Code would serve as a guideline for authorized dealers in the Nigerian Foreign Exchange Market (NFEM) to ensure they uphold the highest standards of professionalism and integrity. “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 statement read.

The FX Code is expected to provide clear directives for market participants, ensuring fairness and transparency in all transactions. It also requires banks’ boards, Chief Executive Officers (CEOs), and Chief Compliance Officers to annually attest to their adherence to the Code’s principles, emphasizing their commitment to market integrity. This measure aligns with broader reforms introduced by the CBN in November 2024 to strengthen governance and deepen Nigeria’s foreign exchange market.

Additionally, under the new framework, authorized dealers are mandated to facilitate FX transactions for individuals and firms while adhering strictly to regulatory compliance. Licensed Bureaux de Change (BDC) operators are also included in these guidelines, which require them to operate within limits set by the CBN and ensure transparency in their dealings. The bank emphasized that all legitimate FX transactions must occur exclusively through authorized dealers, with dealings involving unlicensed intermediaries strictly prohibited.

The launch of this FX Code is anticipated to bolster investor confidence and improve Nigeria’s standing as an investment destination. Analysts believe it will contribute significantly to enhancing trust and attracting foreign capital inflows into the country. As Nigeria continues its economic reforms, this initiative underscores the CBN’s commitment to ensuring a robust and resilient financial system.