- The governor of the Central Bank of Nigeria (CBN) Olayemi Cardoso has warned of severe consequences for violating the newly launched FX Code
- Cardoso said the code represents a raft of guidelines designed to enhance public trust, transparency and accountability in the market
- He said the era of opaque practices in the FX markets is over, warning of serious penalties for violators
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso has warned banks sternly, stressing that violating the newly launched Nigeria Foreign Exchange Code will attract serious sanctions.
The apex bank governor disclosed this during the code’s launch at the CBN headquarters in Abuja on Tuesday, highlighting the significance of the new guidelines.
Credit: Bloomberg/Contributor
Source: Getty Images
Cardoso warns of serious sanctions against offenders
The new code contains a comprehensive and enforceable framework designed by the apex bank to tackle systemic abuse and unethical practices plaguing the forex market.
According to Cardoso, the practices seriously hampered market integrity, benefited a few, and eroded public trust.
The CBN boss said the opaque practices are over as the bank will move against any institution or individual frustrating the integrity of the financial market.
He said the forensic verification of $7 billion in forex backlogs is almost completed.
The CBN helmsman said the forensic exercise revealed multiple violations and illegal practices the bank is ready to prevent.
Cardoso assured stakeholders that backlog settlements would soon be processed, representing a clear step in addressing irregularities in the FX market.
CBN to invoke the law against offenders
He stressed the enforceability of the new FX Code is supported by the CBN Act of 2027, and the Banks and Other Financial Institutions Act of 2020.
Cardoso said this legal backing provides the platform for imposing sanctions and administrative actions against offenders.
He asked stakeholders to ensure full compliance with the Code’s principles, saying that the standards should be embedded in their organisations.
The six pillars of the FX code
Legit.ng previously reported that the code is built on six core pillars: Ethics, Governance, Execution, Information Sharing, Risk Management and Compliance, and Confirmation and Settlement Processes.
They align with international best practices while addressing Nigeria’s unique challenges.
Punch reports that Cardoso described the code as a binding commitment to accountability, asking participants to see it as a collective pledge to ethical conduct in the system.
The report said that the CBN governor highlighted the results of recent reforms in the forex market, which have boosted transparency and efficiency.
The naira rallies amid FX Code launch
Experts say the code aims to position Nigeria’s FX market as one of the most efficient with global standards.
The Nigerian forex market has been dogged by irregularities and irresponsible trading by market participants, leading to the accumulation of FX claims by investors and foreign airlines.
CBN’s actions stabilise the naira
Last November, the apex bank introduced the Bloomberg BMatching System to enhance transparency in the forex market, mandating banks to move to the new platform.
CBN also pegged forex trading at $100,000 for market dealers in the new Nigeria Foreign Exchange Market (NFEM).
The naira has stabilised considerably since the introduction of the Electronic Foreign Exchange Market System (EFEMS).
The local currency has hovered between N1,548 and N1,555 per dollar in the last four weeks, fueling beliefs that it may have found its true value in the market.
CBN adjusts exchange rate as naira trades at new low
Legit.ng earlier reported that the naira traded slightly negatively on Monday, January 27, 2025, after a massive rally on Friday, January 24, 2025.
The naira, which rose below the N1,5400 per dollar ceiling, on Friday fell marginally on Monday, trading at N1,1533.63, down from the N1,531.50 it traded on Friday, January 24, 2024.
With the current rate, the naira maintains relative stability in the FX market compared to the previous weeks as volatility thawed amid the decline in FX reserves.
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
Source: Legit.ng
