The Central Bank of Nigeria (CBN) has auctioned a total sum of $876.26m to 26 qualified banks that took part in the latest Retail Dutch Auction System undertaken by the apex bank.
The auction process which was conducted on Tuesday is targetted at enhancing FX liquidity in the market, alleviating demand pressure and supporting price discovery in tandem with the CBN’s objectives.
The apex bank disclosed this in a statement posted on its website on Wednesday and signed by the Director, Financial Markets Department, Omolara Omofunde Duke.
While explaining the auction process, Duke said that a total bid valued at $1.18bn was received from 32 authorized dealers banks, while bids valued at $313.69m from six banks were disqualified.
According to him, out of the disqualified bids, four banks submitted their bids after the cut-off time of 3:00 pm, while two others did not provide bids in the template submitted.
“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$313.69m from six banks were disqualified,” the statement Duke said.
Recall that the apex bank, had last week, unfolded plans to implement a Retail Dutch Auction System to address the mounting unmet foreign exchange demand from end users.
It said that the purpose was to alleviate the growing pressure in the FX market and stabilize the naira’s exchange rate.
The naira has traded within the range of N1,450 and N1,600 in recent months.
However, the apex bank approved a cut-off rate of N1495/$ for the Retail Dutch Auction.
