In line with its objectives to foster a deeper and more liquid foreign exchange market and develop adequate systems for managing exchange rate risks, the Central Bank (CB) plans to implement the FX Global Code (FXGC) in the domestic forex market by the end of this year. The CB recently revealed ongoing discussions with the ACI Financial Markets Association and market participants to facilitate the implementation of the FX Global Code.
“The purpose of implementing the FXGC in the domestic foreign exchange market is to provide a common set of guidelines to promote a robust, fair, liquid, open, and appropriately transparent market, in which market participants can confidently and effectively transact at competitive prices that reflect available market information,” the CB stated.
The FX Global Code is a set of global principles of good practice in the foreign exchange (FX) market, designed to ensure integrity and effective functioning. It covers principles related to ethics, governance, execution, information sharing, risk management and compliance, and confirmation and settlement processes.
The FXGC aims to create a market where diverse participants, supported by resilient infrastructure, can transact confidently and effectively at competitive prices that reflect current market information, adhering to acceptable standards of behavior.
First published in 2017, the FX Global Code was developed through a collaboration between the public and private sectors, including central banks and market participants. It remains a living document, having undergone a comprehensive review in 2021.
With the continuation of the current flexible exchange rate regime, the CB aims to support trade competitiveness and external sector stability in the coming years, contributing to medium-term economic stability. Market-determined exchange rates are expected to help correct the past anti-export bias and mitigate speculative pressure and subsequent volatility in the exchange rate.
