The Central Bank of Nigeria (CBN) has auctioned a total of $876.26 million to 26 eligible banks as part of the most recent Retail Dutch Auction System conducted by the apex bank.
The auction, which took place on Tuesday, August 6, 2024, was designed to increase foreign exchange liquidity in the market, ease demand pressure, and support price discovery in line with the CBN’s objectives.
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This information was shared in a statement posted on the CBN’s website on Wednesday, signed by Omolara Omofunde Duke, the Director of the Financial Markets Department.
In explaining the auction process, Duke noted that a total of $1.18 billion in bids was received from 32 authorized dealer banks, but bids totaling $313.69 million from six banks were disqualified.
Among the disqualified bids, four banks submitted their bids after the cut-off time of 3:00 pm, and two banks failed to use the required template for their submissions.
The statement read, “A total bid valued at $1.18 billion was received from 32 authorized dealer banks, of which bids valued at $876.26 million from 26 banks qualified, while bids valued at $313.69 million from six banks were disqualified.”
Last week, the CBN announced its intention to implement a Retail Dutch Auction System to address the increasing unmet foreign exchange demand from end users.
The goal was to reduce the growing pressure in the foreign exchange market and help stabilize the naira’s exchange rate.
In recent months, the naira has traded within the range of N1,450 to N1,600 per dollar.
However, the CBN set a cut-off rate of N1,495 per dollar for the Retail Dutch Auction.
