30.2 C
Tuesday, June 18, 2024

FG sells $1Bn bond to address dollar shortage

The Federal Government has sold a one billion dollars bond as 10 years debt to yield 19 per cent, been a measure to lure foreign investors, boost revenue, and as well attract dollar inflows against inflation and other crisis currently plunging the nation’s economy.

According to the government, in addressing dollar shortage, a 10-year debt  was sold and raised 1.5 trillion naira in a bond auction to help lure investors.

FG, through Debt Management Office, said that it received a record of 1.9 trillion naira of bids for two securities on sale and that its sold the debt to yield as much as 19 per cent against 16 per cent January.

From a statement released by the DMO on Tuesday, the government disclosed that the large amount of offer was based on the federal government’s financing needs and that the bond was also an opportunity to attract foreign investors.

“The relatively large amount of offer was based on the federal government’s financing need,”  It’s also an “opportunity to attract foreign investors.”

“The government sold a 7-year security at a yield of 18.5% compared with 15% in January, while the 10-year bond was was auctioned at 19% as against 16% of a similar debt a month ago, the agency said.

Meanwhile, the DMO is offering securities at attractive yields to raise funds for the government and mop up excess naira liquidity in a bid to tame an inflation rate that’s near a 30-year high,  and also attract overseas investors against dollar shortage.

Besides,  the Central Bank of Nigeria had earlier in February offered interest rate on its short-term debt obligation above the benchmark interest rate of 18.7 per cent to attract investors, a move that signals the normalization of interest rates ahead of its meeting next week.

The regulator has relaxed currency controls and introduced a series of other measures since June to reform the foreign-exchange market and ease a dollar scarcity, which has contributed to plunge the local unit by about 70% since the past year.


Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -spot_img

Latest Articles