The Central Bank of Nigeria (CBN) has unveiled a new Foreign Exchange (FX) Code aimed at stabilizing the Naira and regulating the country’s foreign exchange market.
This announcement was made on October 3, 2024, and the guidelines will take effect on October 14, 2024.
According to the CBN, the FX Code is designed to align Nigeria’s financial system with global best practices and is built around six key principles: ethics, governance, execution, risk management and compliance, information sharing, and confirmation and settlement processes.
All market participants are required to submit a self-assessment report detailing their compliance with the FX Code by December 31, 2024. The CBN emphasized that the FX Code aims to foster a robust, fair, liquid, and transparent market, enabling diverse participants to engage in transactions at competitive prices that accurately reflect market conditions.
Furthermore, participants must submit quarterly compliance reports to the Financial Markets Department (FMD), with the first report also due by December 31, 2024.
This initiative follows recent gains of the Naira against the Dollar in both official and parallel foreign exchange markets.
Notably, the CBN had floated the Naira in the FX market on June 14 of the previous year, resulting in a significant decline in its value from N463 per Dollar to N1,659.26 as of Thursday.
