Nigeria’s debt management office (DMO) raised the interest rate on local currency savings bond in a bid to attract investors to the assets as part of efforts to mop up excess liquidity, contain inflation and curb a slump in the naira.
The DMO is offering three-year savings bonds at 13.46%, 139 basis points higher than a previous sale in October and the highest rate in a year, according to a statement on its website on Monday.
There is an expectation that the new Central Bank of Nigeria (CBN) governor Olayemi Michael Cardoso will return to more orthodox monetary policy by raising rates steeply, which is needed to tame inflation that is waging war on Nigerians, help shore up the battered naira and attract foreign portfolio investment by making real rates positive again.
Cardoso who recently unveiled his policy doctrine, urged a need “for interest rates to realign with money supply, inflation and market realities.”
Inflation rate in Nigeria rose to 26.72 percent in September from 25.80 percent in August of 2023, according to recent data from the National Bureau of Statistics (NBS).
The Nigeria 10 year government bond has a 15.432% yield, according to data from World Government Bonds.
Follow the MoneyCentral Nigeria channel on WhatsApp: Click here!
 raised the interest rate on local currency savings bond in a bid to attract investors to the assets){kind=link}