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FOREX Code, Cardoso’s Approach to Stabilizing the Naira

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By Ibrahim Modibbo

Within hours after the launch of foreign exchange code by the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, on January 28, 2025, in Abuja, the positives from this move by the apex bank emerged as the naira appreciated against the US dollar.

 

Following the launch of the FX code on Tuesday, the naira appreciated by 0.

97 percent, gaining N16 against the dollar in the parallel market, by trading at an average rate of N1, 634 compared to N1, 650 it traded on Monday.
In the official window, data from the CBN revealed that the naira was quoted at N1, 533.50 to the dollar at the Nigerian Foreign Exchange Market (NFEM).

Cardoso’s newly introduced FX code is aimed at improving market liquidity, enhancing transparency, and providing guidance for all those participating in the country’s foreign exchange sector.

The code represents a set of principles that are not only encouraged, but accepted as best practices in the global foreign exchange market. The CBN as the regulator of Nigeria’s turbulent forex market drafted the FX code to address risks associated with the emerging financial landscape in the nation, while also strengthening the integrity and functionality of the foreign exchange market.

The CBN in developing the FX code is responding to Nigeria’s financial transformation in recent years and the attendant risks associated with such a growth, in spite of significant progress recorded. The code seeks to establish standards that ensure the efficient functioning of the wholesale FX market, further reinforcing the country’s flexible exchange rate system. It will further promote a robust market that’s characterised by fairness, openness, and adequate transparency, enabling a diverse group of participants to engage effectively at competitive rates that reflect accurate market information. It outlines behavioral standards and best practices that align with global expectations.

Addressing industry players at the launch and alluding to the deep insights and interactions with them, Cardoso said that the acceptance of the FX code reflects the collective vision of everyone for a foreign exchange market built on integrity, fairness, transparency and efficiency, based on its critical nature for Nigeria’s economic growth and stability.

Making reference to the words of the late Nelson Mandela, on the need for leaders to be great listeners, the CBN governor admitted that the apex bank through its interactions with industry players, better understands the perspectives, concerns, and recommendations they expressed. He said the ideas shared reaffirmed the collective commitment to shaping a more resilient and transparent FX market.

He declared that the FX code represents a decisive step forward by the CBN, to set a clear and enforceable standards for ethical conduct, transparency, and good governance in Nigeria’s foreign exchange market. The code, Cardoso added is a firm signal that business-as-usual in the forex market has ended because the code is a blueprint for the future, that is grounded in the hard lessons of the past.

“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 $7billion 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,” he disclosed.

The CBN governor further stated that the period of unprecedented ways-and-means-financing that inflicted significant damage on Nigeria’s economy, contributing to rising inflation, currency depreciation, and eroded public confidence in government’s ability to deal with adverse economic issues is over.

“These practices must never return. The FX Code is a firm rejection of such distortions and an equally firm commitment to a future defined by fairness, trust and market-driven principles. Let us be clear: the system itself played a key role in the challenges of the past.

“Unethical behaviours and systemic abuses – whether by those with privileged access or by complicit participants – eroded public trust and harmed our economy. 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,” Cardoso warned.

Predicting the future, he expressed confidence that the nation’s journey towards market reforms is already yielding positive results. According to him, 2024 was marked by structural reforms which sought to return the naira to a freely determined market price and ease volatility.

Such reforms include the discontinuation of quasi-fiscal interventions, unifying the exchange rate windows, clearing a backlog of foreign exchange commitments, and recalibrating monetary policy tools to redirect the course of Nigeria’s economy, restore order and credibility to our FX market, and refocus the CBN on discharging its core mandates.

Cardoso used the opportunity of the FX code to reel out some notable achievements of his stewardship, pointing to the introduction of the Electronic Foreign Exchange Matching System (EFEMS) in December 2024 that has improved market transparency and efficiency. Since its launch, the naira has appreciated significantly—from ₦1, 663.90 on December 2,

2024, to ₦1, 536.72 as of January 28, 2025. Also worthy of mention is the country’s external reserves that have grown by 12.74 percent, reaching $40.68 billion at the end of 2024.

He emphasized the importance of exchange rate stability, describing it as the cornerstone of macro-economic health for an economy like Nigeria’s. The apex bank governor said that beyond daily market rates, the exchange rate influences critical indicators such as the balance of payments, external reserves, international trade, inflation, economic growth, and foreign investment. These factors collectively, he submitted shape the economic welfare of the nation and that of Nigerians.

To Cardoso, tackling rising inflation remains a major challenge of the CBN under his watch, as in his view, rising prices erode the purchasing power of Nigerians and increases the cost of living. However, he believes strongly too that by fostering an exchange rate stability, the problem of inflation can be tackled head-on.

The FX code, the CBN chief asserted marks a new era of compliance and accountability. The code, he declared is not just a set of recommendations, but an enforceable framework, warning industry players that under the CBN Act, 2007 and BOFIA Act, 2020, violations will be met with penalties and administrative actions. He told stakeholders who attended the launch that they must recognize that adherence to the code is not merely about compliance but about restoring public trust in Nigeria’s financial system.

“Beyond the foreign exchange market, the FX code forms part of our renewed focus on compliance across the financial services industry and I am particularly pleased that we have the leadership of the industry to reinforce a collective commitment to the journey ahead. 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.

“The FX code is built on six core principles—ethics, governance, execution, information sharing, risk management and compliance, and confirmation and settlement processes. These principles align with international standards, while addressing Nigeria’s unique challenges. Together, they provide the foundation for a resilient and transparent market that inspires confidence among both domestic and international participants.

“Today, as we formally launch the FX code, I call on all market participants to embrace its principles wholeheartedly. The six guiding principles and 52 sub-principles must become the standard for conduct across all participating institutions. Leaders in this room – board chairs, managing directors, and chief compliance officers – must lead from the front. Embedding these standards within your organizations is not optional,” Cardosa stated.

He reiterated that the eras of opaque practices is over because the CBN will not hesitate to deal with any institution or individual that undermines the integrity of the financial markets. The code, he added, serves as a collective pledge to transparency, ethical conduct, and fairness in the forex market, and that most importantly, through strict adherence to the code, Nigeria can build a financial ecosystem that embodies resilience, global competitiveness, and economic prosperity.

Dr Modibbo is an Abuja based Development communication analyst.

Economy

Naira Ends Week Stronger Against Dollar, Gaining N11.17 

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The Naira further appreciated in the official market on Friday, trading at N1,474.

78 to the Dollar.

Data from the FMDQ Securities Exchange official forex trading platform revealed that the Naira gained N11.17.

This represents a 0.7 per cent increase compared to the previous day’s trading figure on Thursday, when the local currency closed at N1,485.

95 to the Dollar.

Trading in the Investors and Exporters (I&E) Forex window on Friday saw a high of N1,495.

01 and a low of N1,447.50.

The Naira has remained stable against the US Dollar since December 2024, supported by sustained reforms from the Central Bank of Nigeria (CBN).

The reforms aimed at ensuring transparency in the foreign exchange (FX) market.

CBN Governor Olayemi Cardoso, speaking in Abuja on Thursday at the 2025 Monetary Policy Forum, stated that recent reforms in the FX segment had continued to attract foreign investments.

Cardoso reassured that the apex bank would sustain efforts to ensure continued inflows. (NAN)

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Economy

CBN Approves Listing of CFA on NXP forms for Export Repatriation Proceed

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The Nigeria Export Promotion Council (NEPC) says that Central Bank of Nigeria (CBN) has approved CFA Franc to be captured on Nigeria Export Proceed (NXP) forms for the repatriation of export proceeds.

Mrs Nonye Ayeni, Executive Director of the NEPC, disclosed this while addressing newsmen on the Non-Oil Export Performance for the year 2024, in Abuja on Friday.

Ayeni said that the council had engaged the CBN on the inclusion of the CFA Franc, adding that it was a dominant currency in cross border trading.

She said that the currency was one of the currencies to be received as export proceeds by the bankers.

“I am delighted to inform you that the CBN has magnanimously approved CFA to be captured on NXP forms for the repatriation of export proceeds.

“We will be working with CBN and the banks to ensure full implementation.

“I must say that this is a remarkable breakthrough for the council and further reaffirms the impact of the council’s current flagship programme,” she said.

Ayeni said that the council distributed hybrid seedlings and farm inputs to over 1,200 farmers across the country.

She added that the council has also distributed sesame, Hibiscus and farm input in the north, cashew in the west and palm seedlings in the east.

She said that the effort was to enhance the capacity of farmers, and processors and increasing production capacity of the farmers.

The executive director said that the NEPC, under the “Go Global, Go for Certification” campaign, was determined to enhance the quality of Made-in-Nigeria products.

According to her, the council commenced the certification of 400 Small and Mediumsized Enterprise (SME) exporters.

“I am delighted to inform you that we have concluded on some and the balance are currently undergoing the certification process.

“At the end of the exercise, a total of 855 SMEs will have benefited from the scheme between the year 2022 to year 2025.

She said that the scheme aimed to enable the SMEs to acquire international certification to access niche markets.

Ayeni also noted that through the council’s regional and state offices initiated the process of mainstreaming informal border trade.

She said that the effort would increase foreign exchange earnings and help to capture export data for the country.

“Interactive sessions were held with several trade associations operating within some borders”.

According to her, at the end of the exercise, no fewer than 1,116 operators in the informal sector were trained in formalising export trade.

“We will build on this,” she assured. (NAN)

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Economy

Ecobank Promotes Savings Culture, Rewards N42m to Customers

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Ecobank Nigeria has reaffirmed its commitment to financial inclusion and savings culture by awarding N42 million to its customers.

Ms Adeola Ogunyemi, Head of Consumer Banking, Ecobank Nigeria, made this known at the grand finale of the bank’s Super Rewards ‘Millionaire Geng Promo’ on Friday in Lagos.

She said that the initiative is part of bank’s strategy to deepen financial inclusion for all classes of Nigerians and to reward customers’ loyalty.

“It is not just about winning cash prizes; it is about financial security and long-term stability,” Ogunyemi said.

Ogunyemi also noted the increasing awareness of savings amid economic challenges.

“With the fluctuating value of the Naira, we have encouraged our customers to save consistently, whether in Naira or foreign currency.

“This has led to a steady rise in deposits across the banking sector,” she said.

Ogunyemi advised Nigerians, especially the bank’s customers to ensure financial discipline.

“Many people don’t realise the importance of saving until they face emergencies. No matter how much you earn, it will never be enough if you don’t discipline yourself.

“This initiative is about showing our customers that every amount saved adds up over time,” she said.

Ogunyemi spoke further on the broader economic impact of savings, noting that it fuels long-term investments.

“A country’s economic growth is influenced by how much its citizens save. Over the last six months, we have seen tremendous growth in savings, with customers becoming more conscious of the need to save.

“Month after month, deposits have increased, which is very encouraging,” she added.

She further emphasised that savings, beyond just winning rewards, provide financial security.

Ogunyemi also addressed the evolving savings culture in Nigeria, particularly amid economic challenges.

“With the impact of foreign currency devaluation, we’ve advised customers to save in both Naira and foreign currencies.

“Across the banking industry and within Ecobank, savings deposits have consistently grown.

“We have been actively educating customers through awareness programmes, newsletters, and campaigns like Super Savers and Millionaire Geng,” she said.

She emphasised the transparency of the programme, highlighting that all draws were conducted under regulatory supervision and broadcast live.

Also, Mr Victor Yalokwu, Head of Consumer Segments and Products of the bank, emphasised the importance of consistent saving habits, highlighting how it played a crucial role in determining winners.

“It is important to note that what gave them the opportunity to win was their commitment to saving.

“We set clear criteria: customers needed to save for at least 30 days to qualify for the monthly draw, 90 days for the quarterly draw, and six months for the grand finale.

“The individuals who won two million Naira each did so because they saved consistently for six months,” Yalokwu noted.

He further encouraged customers to develop a culture of disciplined savings, noting that beyond the rewards, financial security and stability were key benefits of the habit.

“I advise our winners to spend wisely and continue saving. The goal is to build financial resilience while enjoying the benefits of the promo,” he added.

Under the reward initiative, the bank customers won a total of N42 million at the end of the grand finale.

A total of 520 customers won N50,000 monthly for six months while 16 won N500,000, quarterly, in September and December.

Similarly,  four customers; Akpofabe Akeman, Odo Chinedu, Saibu Sakiru and Eyo Ekpenyong won two million Naira each from FCT & North, Lagos, Mid-West/ South-West and South-South/ South-East, respectively. (NAN)

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