Market News

Joseph Inokotong

•Naira strengthens to N1,530/$, reserves hit $40.1bn as reforms gain traction

Six months after the Central Bank of Nigeria (CBN) launched the Nigerian Foreign Exchange Code (FX Code), the local currency has gained ground, foreign reserves are rising, and investor confidence is steadily returning.

The FX Code, inaugurated in February 2025, aims to enforce transparency, accountability, and ethical conduct in Nigeria’s foreign exchange market.

Since its implementation, the naira has appreciated from N1,585/$ to about N1,530/$, while the foreign reserves climbed to $40.11 billion in July, the highest in eight months.

CBN governor Olayemi Cardoso described the code as “an enforceable standard” that marks the end of opaque forex practices. “The FX Code sets a new era of compliance and accountability,” he said.

“The FX Code marks a new era of compliance and accountability. The era of opaque practices is over,” CBN Governor, Olayemi Cardoso, stated.

The FX Code is adapted from the Global FX Code, with Nigeria joining over 50 central banks in adopting global best practices.

It features six guiding principles and 52 sub-principles covering governance, execution, ethics, and risk management.

Commercial banks and other market players have formally signed on, with the CBN mandating detailed implementation plans from institutions by January 31, 2025.

President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, credited the naira’s rebound to the FX Code, increased diaspora remittances, and tighter regulation.

The FX Code forms part of the CBN’s broader strategy to stabilise the naira, curb inflation, and improve market confidence.

Analysts expect the naira to remain relatively stable in the months ahead.