Forex Banned Nigeria: Yes or no?
The Regulatory Landscape for Forex Trading in Nigeria
To understand the status of forex trading in Nigeria, it’s essential to examine the roles of the key regulatory bodies:
Central Bank of Nigeria (CBN)
The CBN is the apex authority overseeing Nigeria’s monetary policy and foreign exchange reserves. While it regulates banks, Bureau de Change (BDC) operators, and other financial institutions, it does not directly oversee retail forex trading. The CBN’s primary focus is on managing the Naira’s stability and controlling foreign exchange flows, which can impact forex traders, particularly those trading NGN pairs. For instance, the CBN’s interventions in the forex market to curb Naira volatility can influence trading conditions.
In October 2024, the CBN introduced the Nigeria Foreign Exchange (FX) Code, effective October 14, 2024, to enhance the integrity and efficiency of the Nigerian Foreign Exchange Market (NFEM). This framework targets licensed banks, BDCs, International Money Transfer Operators (IMTOs), and FinTechs, setting guidelines for compliance, risk management, and transparency. While this code primarily affects institutional players, it signals the CBN’s increasing focus on regulating the broader forex market, which could eventually extend to retail trading.
