*Approves N1495/US$ Cut Off Rate, Publishes Total Bids For Transparency In Forex Auction Process
The Central Bank of Nigeria (CBN) said it disqualified $313.69 million foreign exchange bids from six banks on Tuesday.
According to CBN, the disqualifications were due to four banks submitting bids after the 3:00 PM cutoff time and two banks failing to provide bids in the required template. Additionally, all bids with Form Q and unverifiable Forms A and M on the Trade Portal were disqualified.
The apex bank disclosed this today in a statement signed by its Director Financial Market Department, Dr. Omolara Duke noting that the total bids came to $1.18 billion which was received from 32 authorised dealer banks.
CBN also sold a total of $876.26 million foreign exchange through a retail dutch auction to end users whose bids were submitted by 26 banks.
“The CBN undertook the sale of foreign exchange (Fx) toend users through a Retail Dutch Auction System (rDAS) to reduce the demand pressure in the Fx market, and promote price discovery on Tuesday, August 06, 2024.
“Authorised Dealer Banks were required to submit a comprehensive template that contains the details of the Forms A and M of all the outstanding trade backedunmet Fx demand of their customers via email on Tuesday, August 06, 2024, between 9:00am and 3:00pm.
“The templates were all password protected with the passwords submitted to the CBN after the deadline for the submission of the bids, thereafter, the bids were opened and collated.
“The accounts of all end users were to be funded with the naira equivalent of their bids by Wednesday, 07 August 2024. “The settlement for the successful bids is T+2, that is, Thursday, August 08, 2024.
“A total bid valued at US$1.18 billion was received from 32 Authorized Dealers Banks, of which, bids valued at $876.26 million from 26 banks qualified, while bids valued at $313.69 million from 6 (six) banks were disqualified.
“Of the disqualified bids, 4 (four) banks submitted their bids after the cut off time of 3:00pm, while 2 (two) banks did not provide bids in the template submitted. All bids with Form Q, and unverifiable Form A and Form M on the Trade Portal were disqualified.
“In line with the objective of the CBN to boost Fx liquidity to the market as well as promote price discovery, the Bank approved a cut off rate of N1495/US$ for the Retail Dutch Auction where bids valued at $876.26 million from 26 banks qualified.
“To ensure the transparency of the process, the total bids submitted by banks and all qualified bids for payment will be published on the website of the Central Bank of Nigeria for the information of the general public.”