Why CBN Is Introducing Foreign Exchange Code (FX Code)

The Central Bank of Nigeria (CBN), last Tuesday, January 28, launched the Nigerian Foreign Exchange Code (FX Code), with distinguished operators in the Nigeria money and capital markets present.

The epoch event has since left some wondering what the Nigerian Foreign Exchange Code (FX Code) is all about, and in fact, how it stands to impact the economy.

Coming on the heels of the Electronic Foreign Exchange Matching System (EFEMS) launched in December 2024, many indeed are eager to know how it works to improve the dynamics of the Nigerian economy.

Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, who performed the launching was anticipatory of these questions, thus listing a number of advantages

He listed some of the attributes of the Nigerian Foreign Exchange Code (FX Code) thus:

1. to promote accountability, ensure compliance, and engender transparency in the country’s foreign exchange market.
2. “The FX Code marks a new era of compliance and accountability
3. It is not just a set of recommendations, but an enforceable framework.

Cardose emphasised that the Nigerian FX Code, which comes on the heels of the Electronic Foreign Exchange Matching System (EFEMS) launched in December 2024, sets clear and enforceable standards for ethical conduct and governance in the foreign exchange market, addressing past challenges that undermined market integrity.

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“We must not forget where we are coming from. The era of multiple exchange rates, which created privileges for a select few at the expense of most Nigerians, inflicted significant damage on market integrity.”

“Practices such as unprecedented ways-and-means financing contributed to inflation, currency depreciation, and eroded public confidence. These practices must never return,” Cardoso warned.

He noted that unethical behavior and systemic abuses were key contributors to past issues and vowed decisive action against any breaches of the FX Code.

“We will not tolerate any attempts to revert to those practices. Any individual or institution that violates the FX Code will face swift and decisive sanctions.”