By Aduragbemi Omiyale
Last week, the Central Bank of Nigeria (CBN) sold foreign exchange (FX) to some banks in the country through the Retail Dutch Auction System (rDAS).
According to a statement issued by the Director of the Financial Markets Department at the CBN, Ms Omolara Duke, about $876.26 million bids were cleared at the exercise, which took place on Tuesday, August 6, 2024.
The apex bank received bids valued at $1.19 billion from banks in anticipation that the forex would be allocated to their end users, who requested FX through authorised dealer banks.
In the statement, Ms Duke disclosed that bids worth $279 million from six commercial banks were not settled by the banking sector regulator.
She listed the affected lenders as First City Monument Bank (FCMB), Wema Bank, United Bank for Africa (UBA), Stanbic IBTC Bank, SunTrust Bank, and Rand Merchant Bank (RMB).
Explaining the rationale behind their exclusion from the exercise, the CBN employee said the banks did not adhere strictly to the submission guidelines, stressing the importance of this condition laid out by the central bank.
Ms Duke said apart from having the bids submitted between 9:00 am and 3:00 pm on auction days, they must comply with the approved template to be valid.
“The call for bids was in naira/US dollar (N/US$) Currency pair for unmet Fx demand backed by verifiable Forms A and M only.
“All bids were password protected and submitted through the dedicated email address provided by CBN between 09:00 am and 3:00 pm.
“Bids received after 3:000m were disqualified. Passwords for the bids were sent after the auction closed. The total bids received were valued at $1,191,071,651.59.
“After the collation, the Committee of Governors of the Central Bank of Nigeria approved a cut-off bid of N1495.00/$ with the total successful bids of $815,362,006.30,” the statement read.
Business Post gathered that the CBN cleared bids from 26 financial institutions led by Zenith Bank at over $267 million of the successful $876.26 million.