The Nigeria Foreign Exchange (FX) Code, which aims to encourage ethical conduct in the foreign exchange market, has been authorized by the Central Bank of Nigeria.
In order to maintain stability in the foreign exchange market, the CBN has implemented a number of measures, including the introduction of the code.
A new set of guidelines called the FX Code was introduced in October of last year with the goal of enhancing behavior and procedures in Nigeria’s foreign exchange market.
The FX Code, which was inspired by the Global Foreign Exchange Code, is a component of the apex bank’s endeavors to create a more ethical, transparent, and orderly FX market.
It does this by bringing local practices into line with international standards and tackling the particular difficulties of Nigeria’s monetary system.
The Code stresses the promotion of integrity, price discovery, and transparency, topics that have long been contentious given the naira’s volatile character and the apex bank’s actions. Beyond being a local adaption, the CBN FX Code reflects a substantial policy move to enhance the regulatory environment around foreign exchange trading in Nigeria.
Olayemi Cardoso, the governor of the CBN, discussed the effects of the country’s foreign exchange reforms, pointing out that the difference between official and Bureau de Change (BDC) rates has decreased, promoting stability in the foreign exchange market.
The apex bank will continue to “strengthen our mechanisms to be on the watchout for market participants constantly and to ensure that all those who are in that market are subjected to the best practices and those who fail to conform would be appropriately dealt with,” he said, expressing optimism about the reforms’ impact.
Cardoso noted that the latest programs and offerings, like the accounts and non-resident BVN, addressed the conversation between the apex bank and Nigerians living abroad. “I am very confident we will see a positive outcome,” Cardoso stated. The effects of the impact are already beginning to manifest.
In order to overcome previous obstacles, bring the financial sector into line with international norms, and create a more resilient and transparent industry that will propel Nigeria’s economic expansion, he said a compliance department is being established. By the end of February, the department will be operational.