The Bank of Uganda (BoU) has announced that it has formally aligned its foreign exchange (FX) market operations with the FX Global Code, a set of internationally recognized principles designed to promote integrity, fairness, and transparency in the global currency trading market.
In a statement, the central bank said it had reviewed the Code and acknowledged it as a benchmark for good practice in the wholesale foreign exchange market.
BoU confirmed that it now operates as a Market Participant as defined by the Code and is committed to conducting its currency-related activities in line with its principles.
The FX Global Code, first introduced by the Bank for International Settlements (BIS) and major central banks around the world, provides guidelines on ethics, governance, execution, information sharing, risk management, and compliance in the trading of currencies. It was developed in response to past market scandals and aims to restore trust and fairness in how currencies are traded globally.
According to BoU, aligning with the Code means it has taken “appropriate steps” to ensure its operations — including buying and selling foreign currency, setting exchange rates, and managing the country’s foreign reserves — follow transparent and responsible practices consistent with international standards.
While the Code mainly applies to large financial institutions and central banks, its adoption has indirect benefits for ordinary Ugandans. By adhering to the FX Global Code, the Bank of Uganda helps ensure a more stable and trustworthy forex market, which in turn supports a more predictable exchange rate environment.
This stability can affect import prices, fuel costs, and inflation, ultimately influencing the cost of living for ordinary citizens. It also builds investor confidence in Uganda’s financial system, potentially attracting more foreign investment and supporting economic growth.
The FX Global Code is guided by six core principles promoting integrity and professionalism in the foreign exchange market. It emphasizes ethics, urging honesty, fairness, and transparency in all dealings. Governance requires institutions to maintain strong internal controls and accountability, with management ensuring compliance. Execution calls for fair, transparent trading practices free from manipulation.
Information sharing demands responsible communication, safeguarding confidentiality while allowing appropriate market insights. Risk management and compliance focus on identifying and managing risks, preventing misconduct, and ensuring continuous oversight and staff training. Finally, confirmation and settlement stress accurate, timely transaction processing to minimize errors and disputes.
Together, these principles create a framework that enhances trust, efficiency, and stability in global and local currency markets. By adopting the Code, institutions like the Bank of Uganda commit to international standards that promote fair dealing and strengthen confidence in Uganda’s foreign exchange system.