Regulatory Alerts2009-07-08 | TED-FEM-FPC-GEN-01-110-09Revised Guidelines for the Operation of the Foreign Exchange Market: Wholesale Dutch Auction System (WDAS)
The Central Bank of Nigeria is reintroducing the Wholesale Dutch Auction System (WDAS) for foreign exchange market intervention starting July 13th, 2009. This initiative aims to boost activities within the inter-bank and stabilize the Foreign Exchange Market. Under this system, Authorised Dealers are required to submit bids via Reuters Dealing 3000 Xtra System and hard copies of bid requests will be submitted to the Trade and Exchange Department's Abuja office. Successful bids will be advised by 2:00 PM on auction day, with the CBN crediting the current accounts of banks with Naira equivalent amounts at their bid rates. The prevailing exchange rate from the market clearing bid will be applicable for a period. The net open position of banks has been increased to 5% of shareholders' funds starting July 13th, 2009. Contraventions may lead to appropriate sanctions as per relevant laws and CBN guidelines."