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The Central Bank of Nigeria (CBN) has approved the release of the Nigerian Foreign Exchange (FX) Code as a guideline to the banking industry to promote ethical conduct of Authorised Dealers in the Nigerian FX market.
In a notice posted on its website yesterday, the apex bank further announced that the code would be formally launch on January 28, 2025, in Abuja.
In October 2024, the central bank announced the introduction of the Electronic Foreign Exchange Matching System (EFEMS), for Foreign Exchange (FX) transactions in the Nigerian Foreign Exchange Market (NFEM).
The new system was to be implemented not later than December 01, 2024, and preceded by a two-week test run in November.
The system seeks to enhance governance, and transparency and facilitate a market-driven exchange rate that will be accessible to the public.
The CBN further explained that the platform would further reduce speculative activities, eliminate market distortions and give the CBN improved oversight capabilities to effectively regulate the market.
The bank noted that authorised dealers would subsequently conduct all FX transactions in the interbank FX market on the EFEMS approved by the apex bank where transactions will be reflected immediately.
Authorised dealers were, therefore, required to comply with extant guidelines and regulations governing the FX market and ensure that all necessary documentation, training, and systems integrations were concluded ahead of the go-live date.
The central bank added that it would publish real-time prices and buy/sell orders data from the system, and in collaboration with the Financial Markets Dealers Association (FMDA), publish the rules for the EFEMS.
The Nigerian FX Code and revised Market Operating Guidelines for the Nigeria Foreign Exchange Market will also provide guidance to market participants.
James Emejo
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