Regulatory Alerts2009-05-22 | TED-FEM-FPC-GEN-01-088-09Re: Guidelines for the Operation of the Foreign Exchange Market: Retail Dutch Auction Systme (RDAS)
This Central Bank of Nigeria circular, dated May 23, 2007 and addressed to authorized dealers, Class 'A' Bureau de Change operators, oil and oil services companies, other government agencies, and the general public, outlines updated guidelines for the operation of the foreign exchange market through the Retail Dutch Auction System (RDAS). Key amendments include: 1. Funds not utilized within 5 working days by authorized dealers can be used for interbank transactions. The requirement that banks' buying and selling rates should not exceed 1% from the CBN rate has been removed. 2. Oil and oil services companies, as well as government agencies, are given discretion to sell their foreign exchange locally or through the CBN, effective May 25, 2009. 3. Class 'A' Bureau De Change operators (bank and non-bank) now have access to the CBN window every week to buy foreign exchange at a rate not more than 2% above the CBN selling rate. The market day for BDCs is Tuesdays, starting from May 26, 2009. 4. The Retail Dutch Auction System will be conducted twice a week (Mondays and Wednesdays) instead of daily, effective June 1, 2009. The CBN may participate in the interbank market at its discretion. All Authorized Dealers and Class 'A' Bureau De Change operators must adhere to these guidelines, with any non-compliance subject to appropriate sanctions.