CBN offers $300m at WDAS’ last session, Naira falls further.

IN what seems like a “valedictory session,” the Central Bank of Nigeria (CBN), on Monday, offered $300 million foreign exchange at the rested Wholesale Dutch Auction System (WDAS).
The WDAS was suspended and in its place, Retail Dutch Auction System was re-introduced, due to take effect from Wednesday.
The RDAS is now slated for foreign exchange auctions on Mondays and Wednesdays of every week.
Meanwhile, Nigeria’s Naira fell the most in more than 18 months as the central bank held its last currency auction before tightened controls of the sales are implemented, boosting demand for dollars.
The currency retreated 1.1 per cent to N161.55 per dollar by 5:11 p.m. in Lagos, the commercial capital of Nigeria, on Monday, its biggest drop since January 2012 on a closing basis.
The development has brought Naira’s decline in September to 0.1 per cent and pared a quarterly gain of 0.6 per cent- the first gain in three.
CBN had expressed its determination to replace its scheduled wholesale foreign-exchange sales with retail auctions from October 2 to curb dollar demand
The apex bank offered foreign currency twice a week to keep the naira within a range of three percentage points above or below N155 per dollar, but the regulator sold $300 million today, compared with $300.2 million on September 25.
“Dollar demand was high today (on Monday) at the inter-bank market and the central bank auction, being the last day for the wholesale” system, the chief executive officer of Forward Marketing Bureau de Change Limited, Abubakar Mohammed, said by phone.
“With retail auctions, banks will buy dollars on proof of request from customers, unlike in wholesale auctions when they could buy and resell,” he added.
The Naira’s decline today was the biggest among 24 African currencies monitored by Bloomberg and rallied 0.8 per cent last week after CBN Governor, Lamido Sanusi, held the benchmark lending rate at a record high 12 per cent, pledging to use the country’s foreign-exchange reserves to bolster the currency.
There were hopes that retail auctions will probably tighten dollar demand and help support the currency, which has weakened 3.3 per cent this year, Mohammed said.
Also, “Recipients of proceeds of International Inward Money Transfer via Western Union, MoneyGram, among others, shall henceforth be paid in Naira only.
“ The applicable exchange rate for conversion of the proceeds shall be the prevailing interbank rate on the day of payment by the Authorised Dealer. Accordingly, Authorized Dealers are required to conspicuously display foreign exchange rate/naira in the banking hall and/or via any medium for the guidance of the recipients.
“The Consumer Protection Department, CBN has therefore been directed to ensure that recipients are fairly treated by the Authorized Dealers and any case of poor service delivery should be reported promptly to the CBN for appropriate sanction,” CBN said.
However, at the RDAS “the existing limit of $40,000 per annum on Naira debit and credit cards has been reviewed upward to $150,000 per annum subject to monthly rendition of returns by authorised dealer banks and card issuers (MasterCard and VISA) to CBN. The settlement for the cards shall continue to be with inter-bank funds.
“The importation of foreign currency banknotes by authorized dealers shall henceforth be subject to a prior approval of the CBN. Any authorized dealer intending to import foreign currency cash is required to forward an application, stating the amount and purpose to the Director, Trade and Exchange Department, CBN, Abuja for consideration.
“Authorized dealers shall continue to sell foreign exchange cash to BDCs subject to a maximum limit of $250,000 per week per BDC. However, authorized dealers are required to conduct Know-Your-Customer (KYC) check on BDCs they deal with.
“Furthermore, BDCs are required to render weekly returns on utilization of funds purchased from all sources to the CBN, failing which appropriate sanctions shall be imposed.
“Importers intending to pay for imports of non-regulated products valued not more than $250,000 per annum using telegraphic transfers shall only complete e-Form “M” online supported with proforma invoice,” CBN added.
However, the relevant shipping documents shall be submitted to the processing bank by the importer not later than 90 days from the date of the transfer.
Defaulters in the submission of the final shipping documents would henceforth be reported to the CBN monthly by authorized dealers for appropriate sanctions