CBN FX manual takes effect with new rules aimed at improving transparency, liquidity and confidence in Nigeria’s foreign exchange market

Governor of the Central Bank of Nigeria, Olayemi Cardoso, on Tuesday unveiled the fourth edition of the CBN FX Manual, describing it as a critical step towards improving transparency, accountability and efficiency in Nigeria’s foreign exchange market amid ongoing economic reforms.

Also read: CBN absorbs N1.95tn in aggressive liquidity mop-up

The revised manual, which took effect on June 1, replaces the previous edition issued in 2018 and introduces updated operational guidelines for banks, businesses, investors and other market participants.

Speaking at the launch, Cardoso said the foreign exchange market remains a vital pillar of the economy, influencing price stability, trade flows, capital movement and investor confidence.

He noted that significant changes in both the global and domestic economy over the past eight years made the review necessary.

According to Cardoso, the updated framework is designed to provide a clearer and more forward-looking regulatory structure capable of supporting the Central Bank’s broader market reforms.

The governor said the objective is to strengthen clarity, consistency and market efficiency while ensuring greater accountability through enhanced monitoring mechanisms.

The revised CBN FX Manual forms part of a wider reform programme introduced under the current leadership of the apex bank, including the Electronic Foreign Exchange Matching System and the Nigerian Foreign Exchange Code.

Deputy Governor for Economic Policy, Dr Muhammad Abdullahi, said the review was initiated at the beginning of Cardoso’s administration as part of efforts to restore confidence, deepen liquidity and improve transparency across the foreign exchange market.

“A modern FX market cannot thrive in an environment characterised by opacity, fragmentation, delays, uncertainty or excessive administrative bottlenecks,” Abdullahi said.

The updated manual introduces several significant changes affecting importers, exporters, travellers and foreign investors.

Among the new provisions is the harmonisation of Personal Travel Allowance and Business Travel Allowance disbursements with revised Bureau de Change guidelines.

Under the framework, 75 per cent of PTA and BTA transactions will be processed electronically, while only 25 per cent may be paid in cash.

The manual also increases allowable advance payments for imports from 15 per cent to 30 per cent, a move expected to provide greater flexibility for businesses reliant on imported inputs.

In another notable development, processing of Form NXP, the key export documentation platform, will now be free of charge.

The framework further introduces provisions covering service exports, technology-sector remittances and transactions conducted through the Pan-African Payment and Settlement System.

Industry observers say these changes reflect the growing contribution of services, technology and regional trade to Nigeria’s foreign exchange earnings.

The manual additionally creates Non-Resident Investment Accounts and Non-Resident Ordinary Accounts while allowing foreign companies in the extractive sector to repatriate 100 per cent of export proceeds.

For many account holders, one of the most impactful changes is the removal of the mandatory Form A requirement for remittances from ordinary domiciliary accounts, although banks will continue to verify the legitimacy of transactions.

Students studying abroad also stand to benefit, with the framework allowing tuition payments of up to $25,000 per semester for undergraduate and postgraduate programmes.

Commercial banks welcomed the reforms, describing them as a powerful step towards building a more predictable and transparent market.

Group Managing Director of United Bank for Africa, Oliver Alawuba, said the revised framework reinforces the Central Bank’s commitment to transparency, credible price discovery and improved oversight.

Alawuba noted that recent reforms had already altered market dynamics and improved confidence among participants.

Access Holdings Group Managing Director, Roosevelt Ogbonna, said the manual would help eliminate ambiguity and establish clearer operating standards for all stakeholders.

According to Ogbonna, the framework places emphasis on market discipline and provides participants with a better understanding of the rules governing foreign exchange transactions.

Representing the Minister of Finance and Coordinating Minister of the Economy, Permanent Secretary for Special Duties, Mohammed Danjuma, described the manual as an important component of Nigeria’s wider economic reform agenda.

Danjuma said the initiative demonstrates the government’s commitment to macroeconomic stability, accountability and sustainable growth.

Despite widespread support, analysts note that the long-term success of the CBN FX Manual will depend largely on implementation and consistent enforcement.

Nigeria’s foreign exchange market has undergone multiple reform cycles over the years, with many yielding temporary gains before being challenged by economic shocks, foreign exchange shortages and policy uncertainty.

Cardoso acknowledged the importance of execution, stressing that the successful implementation of the revised framework would require cooperation from regulators, banks, businesses and all market participants.

Also read: CBN reports rising bad loans in Nigerian banks

As the new rules move from policy into practice, attention will now shift to whether the reforms can deliver the stable, transparent and liquid foreign exchange market that businesses and investors have long demanded.