Forex: CBN Intervenes, Sells $876.26m At N1,495 In Retail Auction

The Central Bank of Nigeria (CBN) has intervened in the retail end of the foreign exchange market to boost stability of the naira.

The apex bank, on Wednesday sold a total of $876.26 million to end users whose bids were submitted by some 26 banks, in the apex bank’s latest attempt to shore up the ailing naira.

Total bids came to US$1.18 billion which was received from 32 authorised dealer banks.

Of this, bids valued at US$876.26 million from 26 banks qualified, while bids valued at US$313.69 million from six banks were disqualified.

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 CBN approved a cut-off rate of N1495/US$ for the Retail Dutch Auction.

Settlement for the successful bids is scheduled for Thursday, August 8, 2024.

Director of the Financial Markets Department, Omolara Omotunde Duke, affirmed the CBN’s commitment to boosting FX liquidity and promoting price discovery through this auction process.

The sale follows “growing unmet foreign exchange demand” which has “continued to increase the demand pressure in the foreign exchange market, with adverse impact on the exchange rate of the naira,” the CBN said in a circular to lenders last week.

The naira has come under pressure through seasonal demand from summer tourism as well as businesses seeking the greenback to bring in goods in the import-dependent nation.