TheCable

The Central Bank of Nigeria has begun auctioning the Chinese Yuan for the first time since the naira-yuan swap deal was signed in May.

According to a statement by Isaac Okorafor, acting director, communications department, the apex bank received bids on Friday between 9am and 12 noon.

Results from the bids will be announced on Monday, July 24.

The Yuan sales will be part of the bank’s special secondary market intervention sales.

The bank said the sales would be through a combination of spot and short-tenored forwards.

Okorafor said “due to the peculiarity of the exercise, CBN will not be applying the relevant provisions of its revised guidelines for the operation of inter-bank foreign exchange market, that is; the guidelines which direct that SMIS bids be submitted to CBN through forex primary dealers.

“The CBN will also not be applying the guidelines which provide that Spot FX sold to any particular end-user shall not exceed one per cent of the overall available funds on offer at each SMIS session.”

On funding, he said that authorised dealers were to debit the customers’ accounts for the Naira equivalent of their bids.

He added that the CBN would debit authorised dealers’ current account on the day of intervention to the tune of the Naira equivalent of their bid request.

He said that authorised dealers would, however, be allowed to earn 50 kobo on the customers’ bids.

The bank had earlier encouraged importers to use the yuan instead of the dollars for import to reduce dependence on the dollar.

However, crude sales to China would be made in dollars.