The Central Bank has moved from the Wholesale Dutch Auction to the Retail Dutch Auction.
Some financial experts on Wednesday said the re-introduction of the Retail Dutch Auction (RDAs) by the Central Bank of Nigeria (CBN) would bring sanity to the foreign exchange market.
They told the News Agency of Nigeria in separate interviews in Lagos that the measure would check the excesses of Bureau De Change (BDC) operators.
Okechukwu Unegbu, a former President, Chartered Institute of Bankers (CIBN), said that the measure would ensure substantial reduction in dollar demand at the official window.
Mr. Unegbu said the measure would enable the apex bank to track the flow of the dollar into the country.
According to him, the measure will also reduce speculative trading of the naira to avoid CBN’s sanction.
Harrison Owoh, the Managing Director, H J Trust & Investment Ltd., Lagos, said the measure would strengthen sincerity among operators.
Mr. Owoh said that the measure would ensure accountability and strict adherence to the apex bank foreign exchange rules and guidelines.
A manager in a finance firm, who pleaded anonymity, however, blamed the Central Bank for the dollarisation of the economy. The operator said that the apex bank had failed to enthrone checks and balances before issuing licence to operators.
The Central Bank on September 25, suspended its Wholesale Dutch Auctions (WDAS) to check money laundering in the foreign exchange market.
A circular by the Central Bank to BDC operators said that the twice-weekly auction would be replaced by a retail version requiring dealers to reveal the identity of buyers.
It also revoked the licence of 20 BDC operators for money laundering malpractices.
The apex bank said that it took the action because some commercial banks were importing billions of U.S. dollars for onward sale to BDCs.
Support PREMIUM TIMES' journalism of integrity and credibility
Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.
For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.
By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.
TEXT AD: To place an advert here . Call Willie - +2348098788999