The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, has warned financial institutions that violations of the newly introduced Nigeria Foreign Exchange (FX) Code will result in severe penalties. Speaking at the launch of the FX Code in Abuja, Cardoso emphasized that the framework is designed to restore transparency and accountability in the FX market, ending unethical practices that have previously undermined market integrity. He reaffirmed the CBN’s commitment to enforcing strict compliance to protect public trust.
Cardoso revealed that the forensic verification of $7 billion in FX backlogs, which has taken over a year, is nearing completion. The investigation uncovered unethical and illegal practices that contributed to market distortions. He assured stakeholders that final settlements for the backlogs would soon be processed, marking a crucial step toward stabilizing the FX market. He also stressed that the era of multiple exchange rates benefiting a privileged few at the expense of the broader economy is over.
The FX Code is structured around six core principles—Ethics, Governance, Execution, Information Sharing, Risk Management and Compliance, and Confirmation and Settlement Processes. Supported by the CBN Act of 2007 and the Banks and Other Financial Institutions Act of 2020, the Code provides legal backing for imposing penalties on violators. Cardoso urged financial institutions to embed these principles in their operations, highlighting the recent success of the Electronic Foreign Exchange Matching System, which has improved transparency and contributed to the naira’s appreciation.
Source: PUNCH