CBN sells $876.26m to end users through Retail Dutch Auction
CBN sells $876.26m to end users through Retail Dutch Auction
Nike Popoola
The Central Bank of Nigeria (CBN) has sold $876.26m to end users through a Retail Dutch Auction System (DAS).
The banking regulator undertook the sale of foreign exchange to reduce the demand pressure in the Fx market, and promote price discovery on Tuesday, August 06, 2024.
It said in a statement on Wednesday by the Director, Financial Markets Department, CBN, Dr. Omolara Omotunde Duke, titled, ‘the result of the retail Foreign Exchange(fx) sale to end users through Retail Dutch auction undertaken by the Central Bank of Nigeria, on Tuesday, August 06, 2024.
According to the statement, Authorised Dealer Banks were required to submit a comprehensive template that contains the details of the Forms A and M of all the outstanding trade backed unmet Fx demand of their customers via email on Tuesday, August 06, 2024, between 7:00am and 3:00pm.
The templates were all password protected with the passwords submitted to the CBN after the deadline for the submission of the bids, thereafter, the bids were opened and collated.
The accounts of all end users were to be funded with the naira equivalent of their bids by Wednesday, 07 August 2024. The settlement for the successful bids isT+2, that is, Thursday, August 08, 2024.
Giving details of the result of the retail fx sale to end users, the CBN stated, “A total bid valued at US$1.18bn was received from 32 Authorized Dealers Banks, of which, bids valued at US$876.26m from 26 banks qualified, while bids valued at US$313.69m from 6 (six) banks were disqualified.
“Of the disqualified bids, 4 (four) banks submitted their bids after the cut off time of 3:00pm, while 2 (two) banks did not provide bids in the template submitted. All bids with Form Q, and unverifiable Form A and Form M on the Trade Portal were disqualified.
“In line with the objective of the CBN to boost Fx liquidity to the market as well as promote price discovery, the bank approved a cut off rate of N1,495/US$ for the Retail Dutch Auction where bids valued at US$876.26m from 26 banks qualified.”
To ensure the transparency of the process, the total bids submitted by banks and all qualified bids for payment will be published on the website of the Central Bank of Nigeria for the information of the general public, it stated.
