The Central Bank of Nigeria (CBN) has announced plans to introduce a Retail Dutch Auction System to mitigate foreign exchange fluctuations in the country’s forex market.
This decision was communicated in a circular over the weekend, citing a significant increase in the demand for FX in recent times.
The bank highlighted that the scheduled commencement of the DAS on Wednesday, 7 August 2024, intends to address the FX crisis in Nigeria.
Consequently, CBN instructed all authorised dealer banks to write a comprehensive and credible list of outstanding FX demands from their end users.
“The accounts of prospective customers must be naira-backed to qualify for participation in the auction, ensuring immediate settlement upon confirmation of bid acceptance by the CBN,” the apex bank said.
According to FMDQ data from last week, the Naira’s value decreased to N1617.08 per Dollar, even with intervention from the CBN.
The apex bank has provided $254.5 million to FX authorised dealers in the past three weeks.