CBN Unveils New FX Code to Reform Market Practices
The Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, on Tuesday unveiled a new Foreign Exchange (FX) Code to the market. At the event in Abuja, Cardoso stated that it would establish clear and enforceable standards for ethical conduct, transparency, and good governance in the foreign exchange market.
He emphasised that the FX Code represents a decisive step forward, providing a firm signal that ‘business-as-usual will no longer suffice’. “It is also a blueprint for the future, grounded in the hard lessons of the past. We must not forget where we are coming from.
“The era of multiple exchange rates, which created privileges for a select few at the expense of most Nigerians, severely undermined market integrity.
“As an example, the seven billion dollars of FX backlog that has taken over 12 months to verify has led to the discovery of multiple unethical and even illegal practices.
“The forensic verification process is now near complete, and final settlements will be processed accordingly”.
He further noted that the period of unprecedented ways-and-means financing caused significant economic damage, contributing to inflation, currency depreciation, and eroded public confidence.
“The FX Code is a firm rejection of such distortions and an equally firm commitment to a future defined by fairness, trust, and market-driven principles.
“We will not tolerate any attempts to revert to those practices. Any individual or institution that violates the FX Code will face swift and decisive sanctions,” Cardoso asserted. The CBN Governor revealed the progress already being made through market reforms.
“The year 2024 was marked by structural reforms aimed at returning the Naira to a freely determined market price and reducing volatility as several distortions were removed from the market,” he said.
He outlined key reforms, including the discontinuation of quasi-fiscal interventions, unification of exchange rate windows, clearing of foreign exchange commitments, and recalibration of monetary policy tools. These measures, he explained, were necessary to restore credibility to the FX market and refocus the CBN on its core mandates.
“Notably, the introduction of the Electronic Foreign Exchange Matching System (EFEMS) in December 2024 has improved market transparency and efficiency. “Since its launch, the Naira has appreciated significantly, from N1,663 on December 2, 2024, to N1,536 as of Monday,” Cardoso added.
Mrs Omolara Duke, CBN’s Director of Financial Markets Department, described the launch of the Nigerian FX Code as a significant milestone. According to Duke, “It is a reflection of the heart and soul put into shaping the future of the Nigerian foreign exchange market”.
“In putting together the code, the CBN was driven by the belief that “Nigeria deserves a foreign exchange market that is ethical, transparent, and resilient.
“We worked relentlessly to promote an FX market that serves everyone fairly and inspires confidence both at home and abroad,” she said. Duke further noted that the FX Code consists of principles designed to enhance market integrity and functionality.
“The six principles that form the backbone of the code are ethics, governance, execution, information sharing, risk management, and settlement processes.
“These principles represent our collective commitment to a foreign exchange market that reflects our highest aspirations for Nigeria’s financial future,” she explained.
The Chairman of Zenith Bank Plc, Mr Jim Ovia, lauded the initiative, describing the FX Code as a blessing to the banking industry. He stated that it would open up new vistas of opportunities for Nigeria and the banking sector. #CBN Unveils New FX Code to Reform Market Practices#
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