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Nigeria: CBN to Finalize Settlements of $7 Billion FX Backlog, Reinforces Transparency with New FX Code

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CBN to Finalize Settlements of $7 Billion FX Backlog, Reinforces Transparency with New FX Code
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The Central Bank of Nigeria (CBN) is set to begin final settlements of the remaining $7 billion foreign exchange (FX) backlog, according to Governor Olayemi Cardoso. Speaking at the launch of the new FX Code in Abuja, Cardoso confirmed that the forensic verification process is nearing completion, paving the way for the resolution of outstanding obligations.

Highlighting widespread unethical and illegal practices uncovered during the verification process, Cardoso warned that any financial institution found violating FX regulations under the new framework would face strict sanctions.

Crackdown on FX Infractions

Cardoso emphasized the responsibility of bank boards and management to lead by example in ensuring compliance with the FX Code, which establishes ethical standards for authorized dealers. He reiterated that the period of market manipulation and exploitative practices at the expense of the Nigerian economy is over.

“The era of multiple exchange rates, which created privileges for a select few while undermining market integrity, is behind us,” he stated.

He noted that the prolonged verification of the FX backlog revealed significant misconduct, underscoring the need for stricter enforcement.

“The forensic verification process is now near complete, and final settlements will be processed accordingly,” he added.

Cardoso also linked previous economic instability to excessive government financing through ways and means, which contributed to inflation, currency depreciation, and eroded public confidence. He stressed that such practices must not return, declaring the FX Code as a commitment to fairness, trust, and market-driven principles.

Enforcement and Market Integrity

Under the new FX Code, financial institutions must adopt transparent and accountable FX practices.

“Board Chairs, Managing Directors, and Chief Compliance Officers must take the lead in embedding these standards within their organizations—it is not optional,” Cardoso asserted.

“We will not hesitate to act against any institution or individual that undermines the integrity of our financial markets. The FX Code is a binding commitment to accountability and transparency.”

A Call to Action for Ethical FX Practices

Speaking at the event, Oliver Alawuba, Group Managing Director of United Bank for Africa (UBA), hailed the FX Code as a crucial step in stabilizing Nigeria’s FX market.

“This initiative demonstrates our collective resolve to build a foreign exchange market rooted in transparency, professionalism, and ethical conduct,” Alawuba remarked.

He commended the CBN for its reforms, stating that the FX Code would enhance market efficiency, attract greater participation, and reinforce Nigeria’s global financial standing.

“This is not just the unveiling of a framework—it is a call to action for all stakeholders to uphold fairness, ethical behavior, and professionalism,” he added.

Growing Reserves and Economic Stability

Cardoso also revealed that Nigeria’s external reserves had increased by 12.74%, reaching $40.68 billion by the end of 2024. This growth reflects the success of reforms aimed at settling legacy FX obligations and strengthening foreign reserves organically.

With the FX Code in place, the CBN is reinforcing its commitment to a more stable, transparent, and accountable foreign exchange market, ensuring that unethical practices no longer undermine Nigeria’s economic progress.

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