The Central Bank of Nigeria (CBN) has auctioned a total of $876.26 million to 26 qualified banks through the latest Retail Dutch Auction System, conducted on Tuesday, August 6, 2024.
This auction aimed to enhance foreign exchange liquidity, alleviate demand pressure, and support price discovery in line with the CBN’s objectives.
The announcement, signed by Omolara Omofunde Duke, Director of the Financial Markets Department, was posted on the CBN’s website on Wednesday.
Duke explained that the apex bank received total bids valued at $1.18 billion from 32 authorized dealer banks. However, bids amounting to $313.69 million from six banks were disqualified. Of these, four banks submitted their bids after the 3:00 pm cut-off time, and two banks did not use the required bid template.
“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 six banks were disqualified. ”the statement read.
Last week, the CBN announced plans to implement a Retail Dutch Auction System to address the increasing unmet foreign exchange demand from end-users.
The goal is to relieve pressure in the FX market and stabilize the naira’s exchange rate, which has recently traded between N1,450 and N1,600. For this auction, the apex bank approved a cut-off rate of N1,495 per dollar.
