No fewer than six Nigerian banks were disqualified by the Central Bank of Nigeria (CBN) in the latest Retail Dutch Auction System, while a total sum of $876.26m was auctioned to 26 other qualified banks.
The development was made public on Wednesday in a statement posted on the apex bank’s website and signed by its Director, Financial Markets Department, Omolara Omofunde Duke.
Duke explained that a total bid valued at $1.18bn was received from 32 authorised dealers banks while bids valued at $313.69m from six banks were disqualified.
Of the disqualified bids, four banks submitted their bids after the cut-off time of 3:00 pm, while two banks did not provide bids in the template submitted.
The statement read, “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$313.69m from six banks were disqualified.”
The CBN on Tuesday, August 6, 2024, carried out the auction in order to enhance FX liquidity in the market, alleviate demand pressure, and support price discovery in alignment with the apex bank’s objectives.
Last week, the CBN unveiled plans to implement a Retail Dutch Auction System to address the mounting unmet foreign exchange demand from end users.
It said the aim was to alleviate the growing pressure in the FX market and stabilize the naira’s exchange rate.
The naira has traded within the range of N1,450 and N1,600 in recent months.
However, the bank approved a cut-off rate of N1495/$ for the Retail Dutch Auction.
