The Central Bank of Nigeria (CBN) has adopted a strategic initiative through a Retail Dutch Auction System (DAS) with a view to addressing the volatility in the foreign exchange market and growing demand for forex by end users.
In a circular by the apex bank to banksat the weekend, the CBN directed all authorised dealer banks to submit a comprehensive and legitimate list of outstanding FX demands from their end users.
This initiative which willstarton August 7, 2024 is targeted at addressing the increasing demand pressure in the FX market and stabilising the exchange rate of the naira. In the circular to banks, the CBN noted that it has noticed huge increase in unmet FX demands from end users with banks, which has exacerbated the pressure on the FX market and adversely impacted the naira’s exchange rate. It therefore directive that the accounts of prospective customers must be naira-backed to qualify for participation in the DAS, ensuring immediate settlement upon confirmation of bid acceptance by the CBN.