The Governor of the Central Bank of Nigeria has issued a strong warning to financial institutions regarding adherence to the newly launched Nigeria Foreign Exchange Code. He emphasized that any violations of the code will result in severe sanctions. The FX Code aims to restore trust and transparency in the foreign exchange market by addressing unethical practices that have been prevalent in the past. The Governor stated that the era of opaque practices is over and that strict actions will be taken against any individual or institution that compromises market integrity.
The Governor also mentioned the ongoing forensic verification of $7bn in FX backlogs, revealing unethical and illegal practices that the CBN is committed to eradicating. Final settlements for these backlogs are expected to be processed soon. He emphasized the importance of adhering to the FX Code, which is underpinned by existing legal frameworks that allow for penalties and actions against violators.
The FX Code is based on six core principles: Ethics, Governance, Execution, Information Sharing, Risk Management and Compliance, and Confirmation and Settlement Processes. These principles are designed to align with international standards while addressing Nigeria’s specific challenges. The Governor encouraged stakeholders to see the Code as a collective commitment to ethical conduct in the financial system.
Furthermore, the Governor highlighted the positive impact of recent reforms in the FX market, particularly the introduction of the Electronic Foreign Exchange Matching System, which has led to increased transparency and efficiency. This is reflected in the appreciation of the naira from N1,663.90 in early December to N1,536.72 as of January 27, 2025.