See how Nigerians bought dollar at cheap rate through banks

• The Central Bank of Nigeria has announced the successful auction of over $800 million to banks
• The move by the CBN is aimed at boosting forex liquidity and help ease demand pressure on the naira
• Banks were asked to submit requests from customers; 26 banks were successful, while six were disqualified and another four late

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Central Bank of Nigeria (CBN) has sold a total of $876.26 million to end users whose forex bids were submitted by some 26 banks via the Retail Dutch Auction System on Wednesday, August 8, 2024.

This was disclosed by CBN in a statement posted on its website signed by Omolara Omofunde Duke, the Director of the Financial Markets Department.

CBN begins dollar forex retail auction Photo credit: Bloomberg/contributor
Source: Getty Images

CBN unveiled plans to implement the Retail Dutch Auction System to address the mounting unmet foreign exchange demand from end-users.

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This move aims to alleviate the growing pressure in the FX market and stabilize the naira’s exchange rate.

CBN sells dollars to banks

Giving insight on the auction, Omofunde explained a total bids came to US$1.18 billion, received from 32 authorised dealer banks.

However, bids worth $313.69 million from six banks were disqualified.

The disqualifications were due to procedural lapses: four banks submitted their bids after the cut-off time of 3:00 pm, while two banks failed to provide bids in the required template.

The statement reads:

"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."

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

How the bids were made

Punch reports that although the dollar was selling at above N1,600 in the official market, at the Retail Dutch Auction, the apex bank approved a cut-off rate of N1495/$.

This auction marks a significant step in the CBN's efforts to manage FX demand and maintain stability in the market.

CBN crashes dollar For Importers

Legit.ng earlier reported that the Central Bank of Nigeria (CBN) lowered the Nigeria Customs Service foreign exchange rates for cargo clearance in Nigeria’s ports.

The apex bank pegged the Customs exchange rate at N1,600 per dollar from the N1,610 it reported on Wednesday, July 31, 2024.

The development followed the consistent gain of the naira against the US dollar in the official market.

Source: Legit.ng