DMO Slashes FGN Savings Bond Rates

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By Dipo Olowookere

The Debt Management Office (DMO) has lowered the interest rates it is offering for the March edition of the monthly FGN Savings Bonds, Business Post has observed.

Every month, the debt office, on behalf of the federal government, sell the savings bonds to investors, with proceeds use to develop the country.

The bond is tailored and targeted at retail investors with guaranteed quarterly interest payment and repayment of the principal at maturity.

The sole aim of the savings bond is to promote the savings culture in Nigeria while giving retail investors the opportunity to earn income from a secure investment.

For the March offering, the debt office reduced interest rate to be paid for the two bonds it is selling by 0.43 percent.

Business Post reports that while the DMO is selling the two-year savings bond at 11.62 percent, it is offering the three-year maturity at 12.62 percent.

During the last exercise in February 2019, the debt office sold the two-year FGN Savings Bond due February 13, 2021 at 12.05 percent per annum, while the three-year FGN Savings Bond due February 13, 2022 went for 13.05 percent per annum.

Our analysts are of the view that the rates were lowered for this month’s exercise as a result of increasing demand for the debt instruments.

During the January 2019 exercise, the bonds were alloted at 12.125 percent for the two-year paper, while the three-year note was sold at 13.125 percent.

In December 2018, the DMO offered the tow-year bond at 12.402 percent and the three-year tenor at 13.402 percent.

For the November 2018 sale, while the two-year bond was sold at 12.390 percent, the three-year paper went for 13.390 percent.

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