The Central Bank of Nigeria (CBN) on Tuesday, August 6, 2024, successfully auctioned US$876.26 million to 26 Deposit Money Banks (DMBs) under the recent Retail Dutch Auction System (RDAS).
The auction was part of the central bank’s efforts to boost foreign exchange liquidity in the market, reduce demand pressure, and support fit-for-purpose price discovery.
The CBN disclosed the development in a statement posted on its website on Wednesday, signed by the Director-General of the Financial Markets Department, Mr. Omolara Omohunde Duke.
According to the statement, the auction attracted bids totaling US $1.18 billion from 32 authorized dealer banks. However, bids totaling US $313.69 million from six banks were disqualified. The disqualification occurred because four banks submitted their bids after the 3 pm cut-off time and two did not submit their bids in the prescribed template.
The statement said, “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.”
Reporters stated that the CBN last week announced plans to introduce the RDAS to meet the growing unmet demand for foreign currency from end-users. The aim is to ease mounting pressure in the foreign exchange market and stabilize the naira exchange rate which has fluctuated between N1,450 and N1,600 in recent months.
The Central Bank of Nigeria (CBN) approved a new cut-off rate of N1495 per US dollar for its Retail Dutch Auction System (RDAS) in the latest auction.
