The Central Bank of Nigeria (CBN) successfully auctioned $876.26 million to 26 deposit money banks (DMBs) in the latest Retail Dutch Auction System (RDAS) held on Tuesday, August 6, 2024,leadership reports.
This auction is part of the CBN’s efforts to enhance foreign exchange liquidity in the market, alleviate demand pressure, and support price discovery.
The CBN announced this development in a statement released on its website on Wednesday, signed by Omolara Omofunde Duke, Director of the Financial Markets Department.
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According to the statement, the auction attracted bids totaling $1.18 billion from 32 authorized dealer banks. However, bids amounting to $313.69 million from six banks were disqualified. The disqualifications were due to four banks submitting their bids after the 3:00 pm cut-off time, while two banks failed to provide bids in the required template.
The statement read, “A total bid valued at US$1.18bn was received from 32 Authorized Dealer Banks, of which, bids valued at US$876.26m from 26 banks qualified, while bids valued at US$313.69m from six banks were disqualified.”
LEADERSHIP recalls that last week, the CBN announced plans to implement the RDAS to address the increasing unmet foreign exchange demand from end-users. The aim is to ease the growing pressure in the FX market and stabilize the naira’s exchange rate, which has fluctuated between N1,450 and N1,600 in recent months.
In the latest auction, the CBN approved a cut-off rate of N1495/$ for the RDAS.
