The Central Bank of Nigeria (CBN) has introduced the Nigeria Foreign Exchange (FX) Code to reduce financial risks amidst significant transformations in the country’s financial system. Drawing from global best practices, the code aims to enhance the integrity and functioning of Nigeria’s wholesale foreign exchange market. It is designed to promote a more robust, transparent, and competitive market by adhering to high global standards in FX operations.
The FX Code outlines six core principles: ethics, governance, execution, information sharing, risk management, and compliance. These principles are meant to guide market participants, including licensed banks and financial institutions, ensuring that they engage in transactions that are fair, liquid, and in line with global behavioral standards. The code also incorporates measures to prevent illegal financial transfers and enforce anti-money laundering protocols.
This initiative aligns with Nigeria’s flexible exchange rate regime and aims to strengthen market confidence. By encouraging transparency and efficiency, the FX Code is expected to support a well-functioning FX market and improve the resilience of Nigeria’s financial infrastructure, facilitating better transactions at competitive prices.
Source: VANGUARD