The Central Bank of Nigeria (CBN) has approved the release of the Nigerian Foreign Exchange (FX) Code, a major step toward reforming and stabilizing the country’s foreign exchange market. The FX Code, set to launch officially on January 28, 2025, at the CBN Headquarters in Abuja, aims to promote transparency, ethical conduct, and accountability among market participants.
This initiative is part of a broader strategy to address Nigeria’s persistent foreign exchange challenges, which have been exacerbated by speculative activities and market distortions. In October 2024, the CBN introduced the Electronic Foreign Exchange Matching System (EFEMS), an automated platform for FX transactions designed to reduce speculation and improve market efficiency.
The FX Code, coupled with the EFEMS system, is expected to narrow the gap between the official exchange rate and the parallel market rate, a significant factor in stabilizing the naira. By fostering ethical behavior and transparency, the CBN aims to rebuild investor confidence in Nigeria’s financial markets and attract more foreign inflows.
Governor of the CBN, Dr. Olayemi Cardoso, expressed optimism about the new measures, stating, “This FX Code will bring orderliness to our market, curbing excesses and ensuring a level playing field for all participants. We are confident this will strengthen the naira in the long run.”
Market analysts have welcomed the move but caution that the FX Code
