The Central Bank of Nigeria (CBN) says it has concluded plans to undertake a Retail Dutch Auction System (DAS) to mitigate foreign exchange demand for eligible transactions through authorised dealers.
The bank, in a recent circular, directed all deposit money banks (DMB) in the country to furnish it with a comprehensive list of outstanding legitimate foreign exchange demands from their customers no later than Tuesday, August 6, 2024. 
This initiative, set to take place on Wednesday, August 7, 2024, is aimed at mitigating the increasing demand pressure in the FX market and stabilising the exchange rate of the naira.
In the circular, the CBN noted that it observed a significant rise 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.
The circular read: “The CBN has noted growing unmet FX demand from end users with banks. This has continued to increase the demand pressure in the FX market with adverse impact on the exchange rate of the naira.
“Authorised dealer banks therefore are to provide to the CBN, a legitimate list of all outstanding FX demand by end users.”
It said this comprehensive list must include information such as the customer’s name, address, contact details, Bank Verification Number (BVN), account number, Tax Identification Number (TIN), transaction type, Form A or Form M, and Letter of Credit (LC) Number.
The directive mandates that all authorised dealers must submit the required information via email to [email protected] by Tuesday, August 6, 2024, using the provided template.
Additionally, 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.
It added: “The CBN will undertake a Retail Dutch Auction System (DAS) to mitigate the demand for eligible transactions through authorised dealers on Wednesday, August 7, 2024. Consequently, all authorised dealers are to provide the information above via email in the attached template.”
Nigeria has been facing forex volatility since the unification of the exchange rate last year, leading to the devaluation of the naira.
