The Central Bank of Nigeria (CBN) has approved the release of the Nigerian Foreign Exchange (FX) Code, designed to serve as a guideline for ethical conduct among Authorized Dealers in the nation’s FX market. The apex bank revealed in a notice on its website that the code will be officially launched on January 28, 2025, in Abuja.

This development follows the introduction of the Electronic Foreign Exchange Matching System (EFEMS) in October 2024, an initiative aimed at enhancing governance, transparency, and efficiency in the Nigerian Foreign Exchange Market (NFEM). The EFEMS, initially scheduled for implementation by December 1, 2024, was preceded by a two-week test run in November.

According to the CBN, the EFEMS platform is designed to promote a market-driven exchange rate accessible to the public while reducing speculative activities and eliminating market distortions. It will also provide the central bank with enhanced oversight capabilities to effectively regulate the market.

The CBN stated that all Authorized Dealers will be required to conduct FX transactions exclusively through the EFEMS platform. The system will reflect transactions in real-time, ensuring greater transparency and accountability. In preparation for the go-live date, the CBN has mandated dealers to finalize all necessary documentation, training, and system integrations.

To further enhance transparency, the central bank announced plans to publish real-time prices and buy/sell order data from the EFEMS. Additionally, the CBN will collaborate with the Financial Markets Dealers Association (FMDA) to publish the rules governing the EFEMS platform.

The Nigerian FX Code and revised Market Operating Guidelines for the Nigerian Foreign Exchange Market will also provide comprehensive guidance to market participants. “This initiative underscores the CBN’s commitment to fostering a transparent and ethical FX market,” the notice stated.

Industry stakeholders are optimistic that the introduction of the Nigerian FX Code and the EFEMS platform will strengthen confidence in the FX market and contribute to the stability of the nation’s economy.