Nigeria Launches FX Code to Transform Foreign Exchange Market with Integrity and Transparency
Nigeria has officially launched the Nigeria Foreign Exchange (FX) Code on January 28, 2025, marking a major milestone in its financial governance. This new initiative aims to overhaul the nation’s foreign exchange market by instilling principles of integrity, fairness, and transparency, with the goal of creating a more stable and equitable market. The launch, held at the Central Bank of Nigeria (CBN) headquarters, was attended by key industry leaders and stakeholders, who gathered to witness this historic moment for the country’s financial sector.
Mr. Olayemi Cardoso, Governor of the Central Bank of Nigeria, highlighted the transformative potential of the FX Code, emphasizing its role in addressing past challenges such as multiple exchange rates and $7 billion in foreign exchange backlogs. The FX Code introduces six core principles, including ethics, governance, execution, information sharing, risk management, and confirmation and settlement processes. Cardoso stressed that these principles are not optional, but a mandatory framework for enhancing transparency, accountability, and fairness in the FX market.
The FX Code, designed to align with international standards, will tackle the challenges faced by Nigeria’s FX market, such as unequal access to foreign exchange rates. These challenges have hindered economic stability in the past, and the new code aims to restore trust in the financial system. With a clear focus on market-driven principles, the initiative seeks to create a transparent and resilient foreign exchange market that inspires confidence among both domestic and international investors.
One of the key reforms highlighted at the event was the introduction of the Electronic Foreign Exchange Matching System (EFEMS) in December 2024. This system has already improved market transparency and efficiency, with the naira appreciating significantly against the US dollar in a short period. Additionally, Nigeria’s external reserves have seen a notable increase, reaching US$40.68 billion by the end of 2024, further indicating the positive impact of these reforms.
The launch of the FX Code also calls for collective responsibility in ensuring the success of the reforms. Cardoso emphasized that all financial market participants must actively uphold the principles of the code, warning that any attempt to revert to unethical practices would be met with swift action. The initiative is seen as a major step toward achieving economic growth, price stability, and a more competitive and resilient financial ecosystem for Nigeria.
Source: The sun