Regulatory Alerts2009-01-15 | TED-FEM-FPC-GEN-01-002-09Guidelines for the Operation of the Foreign Exchange Market: Retail Dutch Auction System (RDAS)
The Central Bank of Nigeria (CBN) introduces the Retail Dutch Auction System (RDAS) for Foreign Exchange Market intervention starting January 19, 2009. Authorized Dealers will participate on behalf of their customers by submitting bids using a prescribed format and be treated if submitted in soft copy via diskette or flash disc. The CBN will announce the auction amounts on Mondays and Wednesdays at 8:30 am, with results announced by 4 pm on the same days. Successful bids will be debited at bid rates on Tuesdays and Fridays (T+2). Banks must have adequate Naira cover in their CBN accounts during bidding. The CBN may also purchase foreign exchange from other participants such as oil companies, and the prevailing exchange rate will determine the market clearing price. Authorized Dealers must display buying and selling rates conspicuously in their banking halls. Violations of regulations may attract appropriate sanctions as per relevant laws and CBN guidelines.