Following the reintroduction of the Retail Dutch Auction and a bid to reduce the demand pressure in the foreign exchange (FX) market and promote price discovery, the Central Bank of Nigeria (CBN) has sold $876.26 million at N1,495/$1 to 26 qualified banks in its latest Retail Dutch Auction.
This was from the total bid of $1.18 billion received from 32 dealer banks.
However, 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.
This represents about 75% of the total bid amount supplied by the apex bank at the latest auction.
This development was announced in a statement signed by Dr Omolara Omotunde Duke, Director, Financial Markets Department.
The statement reads: “The Central Bank of Nigeria (CBN) undertook the sale of foreign exchange (Fx) to end users through a Retail Dutch Auction System (rDAS) to reduce the demand pressure in the Fx market and promote price discovery on Tuesday, August 06, 2024.
“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 via email on Tuesday, August 06, 2024, between 9:00 am and 3:00 pm. 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.
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“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 Thursday, August 08, 2024.”
The statement noted: “A total bid valued at US$1.18 billion was received from 32 Authorized Dealers Banks, of which, bids valued at US$876.26 million from 26 banks qualified, while bids valued at US$313.69 million from 6 (six) banks were disqualified. Of the disqualified bids, 4 (four) banks submitted their bids after the cut off time of 3:00 pm, while 2 (two) banks did not provide bids in the template submitted. All bids with Form Q, and unverifiable Form A and Form M on the Trade Portal were disqualified.
“In line with the objective of the CBN to boost Fx liquidity to the market as well as promote price discovery, the Bank approved a cut-off rate of N1495/US$ for the Retail Dutch Auction where bids valued at US$876.26 million from 26 banks qualified.”
The CBN noted that it will publish the total bids submitted by banks and the qualified bids on its website to ensure transparency of the process.
By; Babajide Okeowo
The post CBN sells $876.26m out of $1.18bn bid to 26 banks at N1,495/$1 in latest Retail Dutch Auction appeared first on Latest Nigeria News | Top Stories from Naomisophyblog.
