The Central Bank of Nigeria (CBN) on Wednesday said it sold $876.26 million at N1,495/$1 to 26 qualified banks in its latest Retail Dutch Auction.
In a statement by Dr Omolara Omotunde Duke, Director, Financial Markets Department, the CBN explained that the auction was done to reduce the demand pressure in the foreign exchange (FX) market and promote price discovery.
It said authorised Dealer Banks were required to submit a comprehensive template that contains the details of Forms A and M of all the outstanding trade backed unmet Fx demand of their customers as part of the process.
“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 is T+2, that is, Thursday, August 08, 2024,” the statement added.
The CBN said a total bid of $1.18 billion was received from 32 dealer banks but bids from six banks were disqualified, as four banks did not meet up with the deadline while two did not provide bids in their submitted templates.
It further said only about 75 per cent of the total bid amount was supplied by the apex bank at the latest auction.
“In line with the objective of the CBN to boost Fx liquidity to the market as well as promote price discovery, the Bank approved a cut-off rate of N1495/US$ for the Retail Dutch Auction where bids valued at US$876.26 million from 26 banks qualified.”
The CBN said it will publish the total bids submitted by banks and the qualified bids on its website to ensure transparency of the process.
