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 told Reuters. 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 currency flexibility. The debt office sold the 20- and 10-year bonds at 16.29 percent but increased the amount it wanted to raise on the longer maturity.

Copyright Reuters, 2017