August 07, (THEWILL) – The Central Bank of Nigeria (CBN) has successfully auctioned $876.26 million to 26 deposit money banks (DMBs) in the latest Retail Dutch Auction System (RDAS), which washeld on Tuesday, August 6, 2024.
A statement signed by Omolara Omofunde Duke, CBN Director of Financial Markets Department, said the auction was part of the apex bank’s efforts to enhance foreign exchange liquidity in the market, alleviate demand pressure, and support price discovery, in line with its objectives.
According to the statement, the auction attracted total bids worth $1.18 billion from 32 authorised 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.
“A total bid valued at US$1.18bn was received from 32 Authorised 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 read.
The CBN had announced last week its decision to implement a Retail Dutch Auction System. The move which came in response to the mounting unmet demand for foreign exchange among end users, was targeted to alleviate the increasing pressure on the FX market, ultimately stabilising the naira’s exchange rate.
Commenting on the auction process, the director disclosed that a total of $1.18bn in bids were submitted by 32 authorised dealer banks. Of the total bids, $313.69m from six banks were deemed to be ineligible, leaving a net total of $876.26m to be allotted among the 26 remaining banks who met the qualifying criteria.
