CBN announces fresh FX code, demands compliance from banks, BDCs, others

The Central Bank of Nigeria has announced a fresh Foreign Exchange Code as guidelines to legible players in the country’s FX market to stabilize the Naira.

The FX code was contained in a document released on CBN’s official website on Thursday, October 3, 2024.

According to the apex bank, the FX code will regulate Nigeria’s financial system and supervise the foreign exchange market in line with global best practices.

CBN noted that the fresh FX Code is organized around six principles, including ethics, governance, execution, risk management and compliance, information sharing and confirmation and settlement processes.

The apex bank stated that the guideline will take effect on October 14, 2024.

The guideline said all market participants are required to submit a self-assessment report on the level of compliance with the FX code by December 31, 2024.

“The FX Code is intended to promote a robust, fair, liquid, open, and appropriately transparent Market in which a diverse set of Market Participants, supported by resilient infrastructure, can confidently and effectively transact at competitive prices that reflect available market information in a manner that conforms to accepted global standards of behavior and best practices,” he said.

The FX Code should be fully implemented, and each Market Participant be in full compliance by December 31, 2024.

“Market Participants will be required to submit a quarterly report to the Financial Markets Department (FMD), on the level of compliance to the FX Code within 14 days after the end of every calendar quarter, with the first report due by December 31, 2024”, the guideline reads.

This comes as the Naira appreciated against the Dollar at both official and parallel foreign exchange markets.

Recall that on June 14 last year, CBN floated the Naira at the FX market.

The development led to the drop in the value of the Naira in the FX market from N463 per dollar last year on June 13 to N1659.26 on Thursday.