Regulatory Alerts2024-08-09 | August 06,2024The Result of the Retail Foreign Exchange (FX) Sale to End Users through Retail Dutch Auction undertaken by the Central Bank of Nigeria (CBN), on Tuesday, August 06, 2024 (CONT.)
The Central Bank of Nigeria (CBN) conducted a retail foreign exchange (FX) auction on August 6, 2024, selling $815 million to 26 banks at a cut-off bid of N1495.00/US$. The auction aimed to improve FX supply and promote price discovery, with bids submitted between 9:00 a.m. and 3:00 p.m. Six banks were disqualified for late submissions or non-compliance with the bid template.
Press Release
RESULT OF THE RETAIL FX SALES TO END USERS THROUGH AUTHORISED DEALER BANKS VIA THE RETAIL DUTCH AUCTION SYSTEM (RDAS) BY THE CENTRAL BANK OF NIGERIA HELD ON AUGUST 06, 2024 The Central Bank of Nigeria (CBN) on Tuesday, August 06, 2024, undertook retail foreign exchange (Fx) sales to end users via the Authorised Dealer Banks after an evaluation of Fx demand and supply in the Nigerian Foreign Exchange Market to improve supply to the foreign exchange market and promote price discovery.
Retail Dutch Auction System (Rdas)
The retail Dutch Auction System involves the sale of Ex through an auction system to end users. It starts with a call for the submission of bids for an Auction.
All the bids are collated and arranged from the highest bid to the lowest bid.
The Auction mechanism is predicated on the volume of the Fx that is available for sale. In addition, it is also to give forward guidance of the price of exchange rate that will promote Ex market stability.
The cut off point of an Auction, is the lowest exchange rate that clears the volume that is offered for the Auction.
Past Retail Dutch Auction System Undertaken by the Central Bank of Nigeria.
Dutch Auction System was introduced and used by the CBN in 1987, 1990 and 2002-2006, Conduct of August 06, 2024, Retail Dutch Auction The call for bids were in naira/US dollar (N/US$) currency pair for unmet Fx demand backed by verifiable Forms A and M only. All bids were password protected and submitted through the dedicated email address provided by CBN between 09:00 a.m. and 3:00 p.m. Bids received after 3:00pm were disqualified. Passwords for the bids were sent after the close of the auction. The total bids received was valued at US$1,191,071,651.59. After the collation, the Committee of Governors of the Central Bank of Nigeria approved a cut-off bid of N1495.00/US$ with the total successful bids of US$815,362.006.30 (Eight Hundred and Fifteen Million, Three Hundred and Sixty-Two Thousand and Six US dollars and Thirty Cents).
The range of successful bids was N1495.00/US$ - N1650.00/US$ across 26 Six (6) banks were disqualified, this included four (4) banks that banks.
submitted after the 6-hour submission period stipulated (9:00am-3:00 pm). In addition, two (2) banks did not provide bids in the template supplied.
It is hereby emphasised that each end user is allocated foreign exchange at the rate submitted by their bank. The Central Bank of Nigeria settled the retail Fx sales to banks on Thursday, August 08, 2024, at T+2. All Accounts not funded by August 08, 2024, do not qualify.
The results of the Retail Dutch Auction is provided below:
| LOWEST | HIGHEST | |||
|---|---|---|---|---|
| S/N | BANK | SUCCESFUL BIDS (US$) | ||
| BID (N/US$) | BID (N/USS) | |||
| l | ACCESS | 1,500.00 | 1,635.00 | 79,092,862.79 |
| 2 | CITI | 1,497.00 | 1,590.00 | 12,001,875.89 |
| 3 | CORONATION | 1,500.00 | 1,594.00 | 4,474,753.38 |
| 4 | ECOBANK | 1,500.00 | 1,585.00 | 5,320,365.25 |
| 5 | FBN | 1,500.00 | 1,600.00 | 228,994,949.57 |
| 6 | FBN QUEST | 1,500.00 | 1,565.00 | 5,089,359.92 |
| 7 | FIDELITY | 1,495.00 | 1,595.00 | 43,616,742.68 |
| FSDH | ||||
| 8 | 1,510.00 | 1,592.00 | 1,995,399.52 | |
| 9 | GLOBUS | 1,500.00 | 1,575.00 | 11,070,395.30 |
| 10 | GREENWICH | 1,540.00 | 1,540.00 | 17,217.40 |
| 11 | GTB | 1,500.00 | 1,620.00 | 29,543,429.06 |
| 12 | JAIZ | 1,520.00 | 1,585.00 | 16,708,748.35 |
| 13 | KEYSTONE | 1,500.00 | 1,575.00 | 4,635,899.00 |
| 14 | LOTUS | 1,500.00 | 1,590.00 | 4,024,818.31 |
| I ર | NOVA | 1,550.00 | 1,620.00 | 2,098,539.51 |
| I ୧ | PARALLEX | 1,530.00 | 1,558.00 | 548,052.17 |
| 17 | POLARIS | 1,500.00 | 1,595.00 | 10,440,523.75 |
| 18 | PROVIDUS | 1,500.00 | 1,595.00 | 11,453,580.97 |
| 19 | SIGNATURE | 1,520.00 | 1,540.00 | 551,753.00 |
| 20 | STANCHART | 1,500.00 | 1,650.00 | 28,429,525.73 |
| 21 | STERLING | 1,500.00 | 1,595.00 | 14,397,359.41 |
| 22 | TAJ | 1,500.00 | 1,570.00 | 19,107,550.88 |
| 23 | TITAN | 1,500.00 | 1,500.00 | 790.78 |
| 24 | UNION | 1,500.00 | 1,600.00 | 13,268,519.66 |
| 25 | UNITY | 1,500.00 | 1,550.00 | 616,138.33 |
| 26 | ZENITH | 1,500.00 | 1,650.00 | 267,862,855.69 |
| TOTAL | 815,362,006.30 |
Table 1. SUMMARY OF SUCCESSFUL BIDS AT THE FX RETAIL DUTCH AUCTION HELD ON AUGUST 06, 2024
| Table 3: SUMMARY STATISTICS OF THE RETAIL DUTCH AUCTION | ||
|---|---|---|
| 1.0 | TOTAL AMOUNT OF BIDS RECEIVED FROM BANKS | 1,191,071,651.59 |
| 1 | LESS: INVALID FORM Q | 940,000.00 |
| 1 | LESS: UNSUCCESSFUL BIDS BELOW N1495.00/US4 | 60,876,969.26 |
| 1 | LESS: INVALID FORM M | 34,645,183.74 |
| 1 | LESS: 1 (ONE) NO RATE BY PARALLEL BANK | 200,000.00 |
| 2 | 279,043,846.21 | |
| DISQUALIFIIED BANKS | ||
| 2 | TOTAL DISQUALIFIED | 375,705,999.21 |
| 2.0 | TOTAL BIDS SUCCESSFUL | 815,365,652.38 |
| Table 2: DISQUALIFIED BANKS | |||
|---|---|---|---|
| S/N | BANK | AMOUNT US$ | REMARKS |
| l | UBA | 13,213,785.91 | LATE SUBMISSION |
| 2 | FCBM | 178,652,316.84 | LATE SUBMISSION |
| 3 | STANBIC | 57,857,408.12 | LATE SUBMISSION |
| 4 | WEMA | 21,940,547.84 | LATE SUBMISSION |
| 5 | SUNTRUST | 7,379,787.50 | NO BID RATES |
| 6 | RAND | 0.00 | NO BID RECEIVED |
| TOTAL | 279,043,846.21 |
Omolara Omotunde Duke (Ph.D.) Director, Financial Markets Department