The Central Bank of Nigeria (CBN) has introduced a Retail Dutch Auction System (DAS) to address the growing demand for foreign exchange (forex) and stabilize the naira’s exchange rate.

The initiative, which begins on August 7, aims to increase demand pressure in the FX market and reduce volatility.

In a circular to authorized dealer banks, the CBN directed them to submit a comprehensive list of outstanding FX demands from their end users.

The apex bank noted that there has been a significant increase in unmet FX demands, which has exacerbated pressure on the FX market and negatively impacted the naira’s exchange rate.

To participate in the auction, prospective customers’ accounts must be naira-backed, ensuring immediate settlement upon confirmation of bid acceptance by the CBN.