The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has issued a strong warning to banks, stressing that any violation of the newly introduced Nigeria Foreign Exchange (FX) Code will result in severe sanctions. Cardoso made this statement during the launch of the FX Code at the CBN headquarters in Abuja on Tuesday....Read Full Article >>➤
He emphasized the importance of the new guidelines in ensuring the integrity of the forex market. Serious Consequences for Violations: The newly launched FX Code offers a detailed and enforceable framework designed to address widespread abuse and unethical practices in the forex market. Cardoso explained that such practices have caused significant damage, benefiting a select few and eroding public trust.
The CBN Governor made it clear that those engaging in these opaque practices will be held accountable. He also mentioned that the forensic review of $7 billion in forex backlogs is nearing completion, uncovering numerous violations that the CBN is prepared to prevent.
CBN’s Commitment to Accountability
Cardoso assured stakeholders that steps are being taken to resolve the forex backlog and address irregularities in the market. He emphasized that the new FX Code is supported by the CBN Act of 2027 and the Banks and Other Financial Institutions Act of 2020, which provide the legal foundation for imposing sanctions and taking administrative action against offenders.
He urged all stakeholders to fully comply with the principles of the new FX Code, incorporating its standards into their organizations.
The Six Core Pillars of the FX Code
The new FX Code is based on six core pillars: Ethics, Governance, Execution, Information Sharing, Risk Management and Compliance, and Confirmation and Settlement Processes. These pillars align with international best practices while also addressing Nigeria’s unique challenges.
Cardoso called the code a binding commitment to accountability and urged market participants to see it as a collective pledge to ethical behavior in the financial system.
Impact of the FX Code and the Naira’s Recovery
Experts believe that the FX Code will help establish Nigeria’s forex market as one of the most efficient in the world. The Nigerian forex market has long struggled with irregularities and irresponsible trading, which has contributed to the accumulation of forex claims by investors and foreign airlines.
In response to these issues, the CBN introduced the Bloomberg BMatching System in November, aimed at improving transparency in forex trading, and mandated banks to transition to the new platform. Additionally, the CBN pegged forex trading at $100,000 for market dealers in the newly launched Nigeria Foreign Exchange Market (NFEM).
Since the introduction of the Electronic Foreign Exchange Market System (EFEMS), the naira has shown considerable stability. It has remained between N1,548 and N1,555 per dollar over the past month, sparking optimism that it may have reached its true value in the market. ...Read Full Article >>➤
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