Cardoso Launches Revised FX Manual, Warns Operators Against Market Misconduct

Cardoso says revised FX manual will strengthen transparency and warns market operators against regulatory violations before implementation.

The CBN Governor, Olayemi Cardoso, on Friday officially launched the fourth edition of the bank’s Foreign Exchange Manual.

Cardoso said the revised document reflected a broader effort by the apex bank to modernise FX administration in line with evolving global realities and domestic economic adjustments, including inflation management and diversification of FX earnings.

Speaking at the official launch of the Revised Foreign Exchange Manual in Abuja, the central bank governor declared that the new policy takes effect from June 1, 2026.

He warned market operators that compliance expectations begin well before the official take-off date, insisting that the transition period was not an opportunity for regulatory arbitrage or market misconduct.

He said the central bank would continue to provide guidance and clarification to ensure seamless adoption, while strengthening its monitoring framework to ensure fairness, consistency, and accountability.

He said foreign exchange was more than a financial instrument but a critical enabler in any open economy as it anchors price stability, facilitates the flow of goods and capital, and shapes investor sentiment.

He also expressed confidence that the framework would serve as a foundation for sustained progress in the country’s financial system.

“May it serve as a source of clarity, a tool for efficiency, and a foundation for sustained progress within our financial system,” he said as he launched the manual alongside other representatives from government agencies, market operators, and bank chief executives – all of whom hailed the initiative and pledged to make the policy a success.

Cardoso said, “In today’s global environment, marked by volatility, rapid technological change, and increasingly complex cross-border financial flows, the integrity of a country’s FX governance framework is essential for sustaining resilience and confidence.

“This fourth edition is the result of extensive consultation and rigorous technical review, aligned with international best practices. It reflects our commitment to modernising foreign exchange administration to enhance clarity, consistency, and market efficiency.”

According to him, the last edition of the FX Manual was issued in 2018, making the current review both necessary and timely in light of structural shifts in both global and domestic markets.

He said the new edition emerged from extensive consultation with stakeholders and a rigorous technical review process aligned with international best practices.

The central bank governor further explained that the objective was not only to offer regulatory clarity but also market efficiency and predictability, which he said are essential for investor confidence and sustainable capital inflows.

The CBN Governor, however, stressed that implementation would require collective responsibility across all market participants, including authorised dealer banks, corporates, regulators, importers, exporters, and government agencies.

According to him, “The successful implementation of this Manual depends on the commitment of all stakeholders. Your adherence is essential, your cooperation indispensable, and your partnership remains central to the stability and credibility of the Nigerian foreign exchange market.”

Cardoso also emphasised that the manual would be made available free of charge to authorised dealers, describing the decision as part of efforts to prioritise compliance over cost recovery.

He added, “To support seamless adoption, the manual will be readily available at no cost to authorised dealers, reflecting our priority on compliance over cost recovery.

“We will continue to strengthen our monitoring framework to ensure consistency, fairness, and accountability across the system.”

Besides, Cardoso used the platform to reiterate the broader reform philosophy guiding the CBN’s interventions in the foreign exchange market, stressing that stability and credibility required collaboration rather than unilateral action.

He noted that while the CBN had played a leading role in stabilising the FX market, sustained progress depended on shared responsibility among all stakeholders.

He stressed that the “Stability and credibility of the Nigerian foreign exchange market is not one stakeholder’s job. It is a joint collaborative effort. The Central Bank has been at the forefront of driving that stability, but it could not have done it alone.

“We have achieved this in collaboration with people who play active roles in the market, and we look forward to continued collaboration and support.”

Cardoso further underscored the importance of market depth and liquidity, describing them as the ultimate goals of ongoing reforms.

He said a more liquid FX market would reduce distortions, strengthen investor confidence, and lessen pressure on external reserves, which he described strictly as buffers rather than direct sources of market funding.

He said, “What is important is the end game. The end game is a deeper foreign exchange market with more liquidity. So when you hear all these things being discussed, it all comes together in ensuring that we have a deeper and more liquid foreign exchange market.”

The CBN boss maintained that “Reserves are what they are—reserves. They are not what you look to to fund a market.”

Cardoso also highlighted improvements in market turnover, noting that reforms introduced under the current administration have significantly increased daily FX transactions.

According to him, average daily turnover had risen from about $100 million at the start of the administration to between $400 million and $600 million currently, with occasional peaks reaching $1 billion.

He said, “When this administration took over, the average turnover per day was about $100 million. Today, it has increased to an average of between $400 million and $600 million daily.

“We have gone from a situation where we essentially had a one-way market, where the central bank intervened and exited, and everybody waited for the next intervention, to a more dynamic and open market.”

Cardoso maintained that the improved liquidity reflected growing confidence among market participants and a gradual shift toward a more transparent and competitive FX environment.

He expressed optimism that continued reforms would push Nigeria closer to sustained daily turnover of $1 billion, aligning the market with more advanced emerging economies.

He said the apex bank remained committed to building a market that was transparent, stable, deep, liquid, efficient, and globally competitive, capable of meeting the legitimate needs of businesses, investors, exporters, manufacturers, students, and ordinary Nigerians.