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LAGOS May 11 Nigeria sold fewer bonds at
auction than expected as the yields on offer failed to attract
foreign investors worried about currency risk, traders said.
The Debt Management Office (DMO) raised 110 billion naira
($318 million) of the 140 billion naira it had targeted.
The auction took place on Wednesday and the results were
announced on Thursday.
Traders said subscriptions were low because yields were
priced lower than the inflation rate, noting the debt office had
pushed to sell more of its 20-year note.
"The low demand for the bonds reflect liquidity in the
market and investors seeking higher returns," one bond trader
Foreign investors have welcomed moves by Nigerian
authorities to loosen their grip on the naira but will steer
clear of a market they once favoured until they are convinced of
The debt office sold the 20- and 10-year bonds at 16.29
percent but increased the amount it wanted to raise on the
It raised a total of 100 billion naira, 65 billion from the
20-year bonds. The 5-year bond was sold at 16.30 percent.
The government has been selling bonds below inflation in
recent months to curb borrowing costs as it intends to fund half
of this year's forecast budget deficit of 2.36 trillion naira
($7.50 bln) through the local market.
Nigeria issues domestic bonds every month to raise money for
government and help the banking system manage its liquidity.
($1 = 314.50 naira)
(Reporting by Oludare Mayowa; Editing by Chijioke Ohuocha and