Six months after the Central Bank of Nigeria (CBN) launched the Nigerian Foreign Exchange Code (FX Code), the country is seeing tangible economic improvements. The initiative, introduced in February 2025 by CBN Governor Olayemi Cardoso, aims to instill transparency, ethical conduct, and accountability in the FX market. The FX Code—modeled after the Global FX Code—has already led to a firmer naira, rising foreign reserves, and renewed investor trust. Cardoso emphasized that the Code marks a departure from opaque, multi-rate systems that have long eroded confidence in the financial system.
The FX Code’s rollout has coincided with a strengthening of the naira, which appreciated from ₦1,585/$ in February to about ₦1,530/$ in both official and parallel markets. Foreign reserves also rose to $40.11 billion in July—the highest since November 2024—providing nearly 10 months of import cover. Analysts attribute these gains to improved FX liquidity, robust diaspora remittances, and increased investor interest, further validating the CBN’s reforms.
The FX Code has garnered widespread institutional backing, particularly from commercial banks that are now mandated to submit board-approved implementation plans. CBN officials like Muhammad Sani Abdullahi and Dr. Omolara Duke have been instrumental in securing buy-in. Industry figures such as ABCON President Aminu Gwadabe also praised the Code, citing improved regulatory clarity and rising FX inflows as major benefits. The Code, though not exhaustive, sets enforceable standards and authorizes the CBN to monitor compliance rigorously.
The FX Code is a key part of broader monetary reforms aimed at stabilizing Nigeria’s economy. In 2024, the CBN raised the Monetary Policy Rate (MPR) to 27.5%—an 875 basis-point increase—to curb inflation. Experts like Ifeanyi Ubah of Commercio Partners view the decision to maintain this rate as a signal of the CBN’s commitment to macroeconomic stability. Governor Cardoso believes that Nigeria is entering a disinflationary phase as tighter policies and exchange rate unification begin to take effect.
While challenges like full institutional compliance remain, the FX Code has laid the groundwork for lasting foreign exchange reform. The CBN is conducting routine compliance checks and requiring self-assessments from market participants to enforce discipline. Analysts and stakeholders agree that these policies—especially the unification of exchange rates and clearing of outstanding FX obligations—are fostering a more transparent, predictable business environment. The FX Code stands as a cornerstone in Nigeria’s quest for economic resilience and global financial integration.
Source: Tribune