The Central Bank of Nigeria (CBN) has sold $876.26 million at a rate of N1,495/$1 to 26 qualified banks through the Retail Dutch Auction. This is part of the total bid of $1.18 billion received from 32 dealer banks. However, bids from six banks were disqualified. Four banks missed the deadline, while two did not provide bids in the submitted templates. This amounts to 75% of the total bid amount offered by the CBN at the latest auction.
Dr. Omolara Omotunde Duke, Director of the Financial Markets Department, announced this in a statement. The statement notes that the objective of the CBN is to reduce demand pressure in the foreign exchange (FX) market and to promote price discovery. Authorized Dealer Banks were required to submit a comprehensive template containing the details of outstanding trade-backed unmet FX demand of their customers via email and were set a submission deadline. The accounts of all end users were to be funded with the naira equivalent of their bids by a specific date, and settlement for the successful bids was scheduled for a later date.
The CBN approved a cut-off rate of N1495/US$ for the Retail Dutch Auction where bids valued at US$876.26 million from 26 banks qualified. The CBN also stated that it will publish the total bids submitted by banks and the qualified bids on its website to ensure transparency of the process.