By Okechukwu Nnodim with agency reports

The Debt Management Office on Wednesday said it had plans to sell N70bn in three, five and 10 years sovereign bonds on August 17.

Reuters reported that the DMO would sell N30bn of the three-year, N15bn of five-year and N25bn of 10-year papers, which are due to mature in 2014, 2015 and 2018 respectively.

The N70bn bond sale is the eight debt auction of the year embarked upon by the debt office.

According to the debt office, all the papers are reopening of previous issues and the results of the auction will be published the following day.

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

Meanwhile, the naira fell against the United States dollar on the inter-bank market on Wednesday.

This was followed the Central Bank of Nigeria’s inability to meet all the demand for the dollar at its foreign exchange auction.

Reuters reported that the naira closed at 154.04 to the dollar on the inter-bank market, its lowest in two months, compared to 152.80 per dollar on Tuesday.

The CBN sold $250m at N150.75 to the dollar at its auction, short of the $369.30m demanded and the $450m sold at N150.50 to the dollar on Monday.

Dealers on the foreign currency noted that the naira might continue northward if the apex bank failed to meet the dollar requirement by traders, adding that a major inflow from the oil companies was necessary at the moment.

“The naira weakened against the dollar on both segments of the forex market due to strong demand for the dollar and coupled with the fact that the central bank was unable to clear all demand at the auction,” said a dealer.

Chevron and Addax – two major oil firms in Nigeria, sold $33.5m and $7m to some lenders, on Tuesday and Wednesday respectively, but traders explained that the sum was not sufficient to support the naira.

Source: Punch