Central Bank of Nigeria Governor, Olayemi Cardoso, has issued a strong warning to financial institutions, stressing that any violations of the newly introduced Nigeria Foreign Exchange Code will result in severe penalties.
At the launch of the FX Code at the CBN headquarters in Abuja on Tuesday, Cardoso emphasized the importance of the framework in rebuilding trust and ensuring transparency in the country’s foreign exchange market.
The FX Code is a robust and enforceable framework aimed at tackling systemic abuses and unethical practices that have historically plagued the FX market.
The governor stated that these practices had severely damaged market integrity, created advantages for a select few, and undermined public trust.
“Let me reiterate: the era of opaque practices is over,” Cardoso declared. “We will not hesitate to act against any institution or individual that undermines the integrity of our financial markets,” he said.
Cardoso revealed that the forensic verification of $7 billion in FX backlogs, a process spanning over 12 months, is nearly complete.
He pointed out that the exercise uncovered numerous unethical and illegal practices, which the CBN is committed to preventing moving forward.
He reassured stakeholders that final settlements for the backlogs will be processed shortly, representing a key step in rectifying previous distortions in the FX market.
Cardoso said “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, severely undermined market integrity.
“As an example, the $7bn of FX backlogs that has taken over 12 months to verify has led to the discovery of multiple unethical and even illegal practices that we should not be proud of as a nation. The forensic verification process is now near complete, and final settlements will be processed accordingly.”
The governor further confirmed the enforceability of the FX Code, which is backed by the CBN Act of 2007 and the Banks and Other Financial Institutions Act of 2020.
These legal frameworks empower the imposition of penalties and administrative actions against violators.
The apex bank governor urged Board Chairs, Managing Directors, and Chief Compliance Officers to ensure strict adherence to the Code’s principles, emphasizing that integrating these standards within their organizations is non-negotiable.
“Self-regulation and conduct are at the core of the changes in culture we expect to see at play in the industry, and I expect the principles of the FX Code to be applied across other business areas,” he stated.
