Business

CBN Allocates $876m FX to Banks At N1495/$ In Recent Auction Amid Rising Demand

The Central Bank of Nigeria (CBN) on Wednesday confirmed that it sold Foreign Exchange (FX) to end users through a Retail Dutch Auction System (rDAS) on August 06, 2024, to reduce the demand pressure market, and promote price discovery.

The central bank further disclosed that a total bid valued at $1.18 billion was received from 32 Authorised Dealers Banks (ADBs), of which $876.26 million from 26 banks qualified at a cut off rate of N1495/$.

The apex bank also disclosed that bids from six banks valued at $313.69 million were disqualified.

The result of the retail FX sale to end users through rDAS, was communicated via a circular dated August 6, 2024, signed by CBN Director, Financial Markets Department, Dr. Omolara Omotunde Duke.

The CBN noted that its intervention at the rDAS was in line with the objective of the bank to boost liquidity to the market as well as promote price discovery.

The apex bank further explained that four banks submitted their bids after the cut off time of 3:00pm, while two banks did not provide bids in the template submitted, thus earning them a disqualification.

The CBN added, “All bids with Form Q and unverifiable Form A and Form M on the trade portal were disqualified.”

It added that to ensure the transparency of the process, the total bids submitted by banks and all qualified bids for payment will be published on the CBN’s website for the information of the public.

According to the central bank, ADBs were required to submit a comprehensive template that contained the details of the Forms A and M of all the outstanding trade backed unmet FX demand of their customers via email on 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, and the bids were opened and collated, thereafter.

Furthermore, 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,” the central bank added.

The bank, in a circular to banks, announced a strategic intervention through the rDAS in a bid to address the growing unmet liquidity demand from end users.

The initiative aimed to mitigate the increasing demand pressure in the FX market and stabilise the Naira exchange.

The CBN said it observed a significant rise in unmet FX demands from end users with banks, which had exacerbated the pressure on the FX market and adversely impacted the naira’s exchange rate.

“The CBN has noted growing unmet FX demand from end users with banks. This has continued to increase the demand pressure in the FX market with adverse impact of the exchange rate of the Naira”, the circular noted.

The rDAS complements the two-way quote system deployed over the past few months to enhance liquidity in the interbank market, through which over $305 million of FX has been sold to authorised dealers in the last three weeks.

The CBN stated that its policy objectives are yielding tangible results and bolstering market confidence.

It stated that net FX flows rose to $25.4 billion between January and June, marking a 55 per cent year-over-year increase.

This growth had been driven by a rise in capital importation, which reached $6 billion in June 2024, and record inflows from diaspora remittances through formal channels.

The forex market is also showing signs of improvement and increased depth, with more robust and diversified sources of liquidity contributing to the sustained convergence of exchange rates across all segments of the market.

The official market recorded a turnover of $43 billion in customer transactions by the end of July 2024, with CBN-supplied liquidity representing less than 5 per cent of total market activities.   

The CBN said it remained steadfast in its commitment to fostering a transparent, market-driven foreign exchange market, and it will continue to strengthen the market’s capacity to meet the needs of all legitimate participants.

James Emejo

Follow us on:

AriseNews

View Comments

  • AUTHORISE AND APROVED BY THE
    FEDERAL GOVERNMENT OF NIGERIA.📞📞📞👉O8l__3211__5O39
    Registered cars below:�Auction... Auction... Auction...
    Greetings...
    Get Your Clean And Neat Tokumbo cars e.g Golf 1 ===#150, 000,
    Golf 2 ===#250, 000,
    Golf 3 ===#320, 000,
    Golf 4 ===#350, 000,
    Golf 5 ===#380, 000,
    Golf 6 ===#400, 000,
    Golf 7 ===#450, 000
    Call custom Omar ON O8O__6739__9O9O
    Toyota Camry 2.2 =400,000
    Toyota Camry 2.4 =500,000
    Toyota Corolla =550,000
    Toyota Spider =1m850,000
    Toyota Muscle =1m850,000
    Toyota Matrix =850,000
    Toyota Avalon =1.350,000
    Toyota Avensis =1m250,000
    Toyota Picnic =550,000
    Toyota Sienna =75,0 ,
    Toyota Rav4 =950,000
    Toyota Sequoia =950,000
    Toyota Tacoma =2m650,000
    Toyota 4Runner =850,000
    dyna truck 1.3Million

Recent Posts

German Consulate Hosts Unity Day In Lagos as Diplomatic Ties Bloom

The 34th anniversary of German Unity celebrated in Lagos, was hosted by Consul General Weert…

5 hours ago

Matt Gaetz To Exit Congress Following Withdrawal As DOJ Nominee Amid Controversy

Matt Gaetz has said he will not return to Congress after withdrawing as Trump’s DOJ…

7 hours ago

Tinubu Seeks Senate Approval For Oluyede As Chief Of Army Staff

President Tinubu has sought Senate confirmation of Olufemi Oluyede as Chief of Army Staff, citing…

8 hours ago

Netanyahu Risks Arrest in UK as ICC Issues Warrant Against Him For War Crimes

Israeli PM Netanyahu faces potential arrest in the UK as Downing Street pledges to fulfill…

10 hours ago

Second Australian Teen Dies from Suspected Methanol Poisoning in Laos

A second Australian teenager has died of suspected methanol poisoning in Laos, bringing to six…

10 hours ago

Simon Ekpa Arrested, Denies Being IPOB Leader + Atiku Says Tinubu’s Loans Are Bone-Crushing – Trending With Ojy Okpe

https://www.youtube.com/watch?v=mFlFl1mPGC8 The arrest of self-proclaimed Prime minister of the Biafra Republic, Simon Ekpa who was…

11 hours ago