CBN launches Fx code, to settle backlogs soon

The Central Bank of Nigeria (CBN) has launched the Nigeria Foreign Exchange (FX) Code, aimed at fostering transparency, ethical practices, and efficiency in the nation’s foreign exchange market. Speaking during the launch in Abuja on Tuesday, the CBN governor, Mr Olayemi Cardoso, explained that the FX code sets clear and enforceable standards to address past […]

The Central Bank of Nigeria (CBN) has launched the Nigeria Foreign Exchange (FX) Code, aimed at fostering transparency, ethical practices, and efficiency in the nation’s foreign exchange market.

Speaking during the launch in Abuja on Tuesday, the CBN governor, Mr Olayemi Cardoso, explained that the FX code sets clear and enforceable standards to address past malpractices and prevent a recurrence of systemic abuses that have undermined Nigeria’s financial ecosystem.

Cardoso said: “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 $7bn of FX backlogs that has taken over 12 months to verify has led to the discovery of multiple unethical and even illegal practices that we should not be proud of as a nation. The forensic verification process is now near complete, and final settlements will be processed accordingly.”

He said the FX Code is structured around six core principles namely: Ethics, Governance, Execution, Information Sharing, Risk Management and Compliance, and Confirmation and Settlement Process, which align with global standards while addressing Nigeria’s unique challenges.

The CBN boss further warned that violations of the FX code would not be tolerated, while urging market participants, including bank board chairs, managing directors, and compliance officers, to adopt the principles of the FX code within their organisations.

The apex bank tsar also disclosed that the period of unprecedented ways-and-means-financing inflicted significant damage on our economy, contributing to inflation, currency depreciation, and eroded public confidence.

He said: “These practices must never return. 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.

“Let us be clear, the system itself played a key role in the challenges of the past. Unethical behaviours and systemic abuses – whether by those with privileged access or by complicit participants – eroded public trust and harmed our economy. 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.

“Our journey towards market reform is already yielding results. The year 2024 was marked by structural reforms which sought to return the naira to a freely determined market price and ease volatility as several distortions were removed from the market.

“Reforms including discontinuation of quasi-fiscal interventions, unifying the exchange rate windows, clearing a backlog of foreign exchange commitments, and recalibrating monetary policy tools were all necessary to redirect the course of our economy, restore order and credibility to our 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 1,663.90 on December 2, 2024, to 1,536.72 as of yesterday.”

Cardoso disclosed that external reserves have grown by 12.74%, reaching US$40.68 billion at the end of 2024, reflecting the effectiveness of reforms aimed at paying off legacy FX obligations and growing reserves organically.

He said the FX code marks a new era of compliance and accountability, adding that it is not just a set of recommendations but an enforceable framework.

The Nigerian currency at the unofficial market maintained its face value at the second trading session of the week.

Currency traders bought the US dollar for N1640/$ and sold at N1650/$ on the black market.