The Central Bank of Nigeria (CBN) has released new revised guidelines for the operation of the foreign exchange market and wholesale Dutch Auction System (WDAS) in the country.

A circular signed by the Acting Director, Financial Markets Department of the CBN, O. F. Owolabi, posted on the bank's website prohibited commercial banks from selling foreign currency purchased at its twice weekly auctions to bureaux de change and hotels.

According to the circular, funds purchased from CBN at the auctions shall be used for eligible transactions only, subject to stipulated documentation requirements.

Such fund shall not be transferable in the inter-bank foreign exchange market including sales to the BDCs, hotels, etc.

The apex bank further stated that authorised dealers shall continue to bid at the WDAS-SPT on their own accounts, stressing that while authorised dealers have been granted the daily Net Open Position (NOP) limits, WDAS-SPT bids shall be reflective of the immediate demand for the clients of the authorised dealer.

The statement directed that dealers shall return to the CBN any unutilized funds purchased from the WDAS-SPT within five working days and the funds shall be purchased by the CBN Forex at a rate to be determined by the CBN.

It stated that the CBN may also purchase foreign exchange from authorised dealers and other participants such as oil companies, among others at their offer rates.

It said that the CBN shall be shall responsible to deliver the Naira cover for US Dollar bought from the banks to the banks' Current Accounts at the

CBN while the banks shall deliver US Dollars sold to the CBN, to the CBN Special Fem Account with Chase Manhattan Bank New York.

On the submission of bids, he said that authorised dealers shall submit bids for not more than one tranche per auction, stressing that the minimum bid amount to be submitted would be $500,000.00 (five hundred thousand dollars) and the currencies of transaction shall be the Nigerian Naira (NGN) and United States dollar (USD).

The apex regulator however said that it has the right to determine the amount that would be sold to an authorised dealer from time to time.