The Central Bank of Nigeria (CBN) has introduced a fresh Foreign Exchange Code to guide participants in the country’s FX market, aiming to stabilize the Naira.

This move is part of efforts to regulate Nigeria’s financial system and supervise the foreign exchange market in line with global best practices.

The new FX Code is built around six core principles:

• Ethics: Promoting transparency and accountability
• Governance: Ensuring effective oversight and management
• Execution: Facilitating efficient and timely transactions
• Risk Management and Compliance: Minimizing risks and ensuring adherence to regulations
• Information Sharing: Encouraging open communication among market participants
• Confirmation and Settlement Processes: Streamlining transaction processing ¹

The guidelines will take effect on October 14, 2024, and all market participants must submit a self-assessment report on their compliance level by December 31, 2024. Quarterly reports will also be required, starting from December 31, 2024.

This development comes as the Naira has appreciated against the Dollar in both official and parallel foreign exchange markets. The Naira gained N43.83 in September, with the external reserves surging by 15.26% year-to-date to $38.06 billion.

The CBN’s intervention, including selling dollars to Bureau De Change (BDC) operators, has contributed to the Naira’s positive performance in the official market. However, the parallel market continues to face pressure, with the Naira depreciating by 2.79% in September.