ABUJA, May 24 (Reuters) - Nigeria's central bank sold one-year treasury bills on Friday at a yield of 28.91%, the highest in at least 30-years, as it sought to draw foreign investors to support the naira, auction results showed.
The bank sold 1.14 trillion naira ($773.41 million) worth of one-year notes at a discounted rate of 22.49% after it initially offered 350 billion naira at the auction.
The central bank on Tuesday hiked rates for the third time this year to 26.25% to try to tame soaring inflation and support the naira, which has weakened significantly due to dollar shortages.
"Foreign investors will likely want to see lower spot volatility ... and additional sources of capital inflows to feel more comfortable about the Nigeria bill investment case," said Samir Gadio, head of Africa strategy at Standard Chartered Bank.
Nigeria's government is borrowing at very high nominal yields given its funding requirements and the need to compensate debt holders and draw foreign exchange to prop up the ailing currency. But rates remain negative as inflation topped 33.69% in April.
The government sold one-year bills at a yield of 26% on Wednesday, unchanged from a previous auction, as authorities tried to cap interest costs, analysts say.
Nigeria's economy slowed in the first quarter of this year from the previous quarter, with analysts citing restrictive central bank policy as one factor constraining growth.
($1 = 1,474.00 naira) (Reporting by Chijioke Ohuocha Editing by Chris Reese)
