Nigeria has realised 65 billion naira from its sale of 10-year sovereign bonds, at yields 150 basis points lower than its previous auction in October, according to a statement from Debt Management Office (DMO).

A breakdown of the amount shows that the country realised 35 billion naira from the 10-year papers due to mature in 2018 and 30 billion naira in those maturing in 2019 at its 11th monthly debt auction held Thursday in the capital city of Abuja (US$1=155 naira).

The 10-year papers were all sold at a 16.50 per cent marginal rate.

The country issues sovereign bonds monthly to support the local bond market create a benchmark for corporate issuance and fund its budget deficit.

According to the private Guardian newspaper, the 10-year papers attracted 18 per cent marginal rate at the last month’s auction, reflecting the hike in central bank’s benchmark interest rate. Rates have however, come down to reflect greater liquidity in the market.

DMO explained that market is coming back in terms of pricing as increased liquidity in the system helped boost interest in the papers.

The Central Bank had raised its benchmark rate far further than analysts expected last month by 275 basis points to 12 per cent and hiked cash reserves requirement to 8.0 per cent from 4.0 per cent in a move to tighten liquidity and help curtail demand for foreign exchange.

The hike led to a rapid increase in yields across the board on fixed income assets, but pricing is gradually reversing to reflect greater liquidity in the market from budget disbursal to the three tiers of government.