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CBN Governor, Yemi Cardoso
The Central Bank of Nigeria Governor, Olayemi Cardoso, has issued a stern warning to financial institutions, emphasising that violations of the newly launched Nigeria Foreign Exchange Code will attract severe sanctions.
Speaking during the launch of the FX Code at the CBN headquarters in Abuja on Tuesday, Cardoso highlighted the significance of the framework in restoring trust and transparency in the country’s foreign exchange market.
The FX Code represents a comprehensive and enforceable framework designed to address systemic abuse and unethical practices that have plagued the FX market in the past.
According to the governor, these practices severely undermined market integrity, created privileges for a select few, and eroded public trust.
“Let me reiterate: the era of opaque practices is over,” Cardoso declared. “We will not hesitate to act against any institution or individual that undermines the integrity of our financial markets,” he said.
Cardoso disclosed that the forensic verification of $7bn in FX backlogs, a process that has taken over 12 months, is nearing completion.
He noted that the verification exercise revealed multiple unethical and illegal practices that the CBN is determined to prevent in the future.
He assured stakeholders that final settlements for the backlogs will soon be processed, marking a critical step in addressing past distortions in the FX market.
The apex bank governor said, “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 $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.”
The governor further affirmed the enforceability of the FX Code, which is supported by the CBN Act of 2007, and the Banks and Other Financial Institutions Act of 2020.
These legal instruments provide the framework for imposing penalties and administrative actions on violators.
Cardoso called on Board Chairs, Managing Directors, and Chief Compliance Officers to ensure full adherence to the Code’s principles, stressing that embedding these standards within their organisations is non-negotiable.
“Self-regulation and conduct are at the core of the changes in culture we expect to see at play in the industry, and I expect the principles of the FX Code to be applied across other business areas,” he stated.
The FX Code is built on six core principles: Ethics, Governance, Execution, Information Sharing, Risk Management and Compliance, and Confirmation and Settlement Processes.
These principles align with international best practices while addressing Nigeria’s unique challenges.
Cardoso described the Code as a binding commitment to accountability and transparency, urging stakeholders to view it as a collective pledge to ethical conduct in the financial system.
He also highlighted the results of recent reforms in the FX market, which have improved transparency and efficiency.
The introduction of the Electronic Foreign Exchange Matching System in December 2024 has been particularly impactful, with the naira appreciating significantly from N1,663.90 in early December to N1,536.72 as of January 27, 2025.
