ABUJA - Nigeria's central bank allotted more bills than it had offered at an auction on Wednesday, and priced its one-year note to yield more than its benchmark rate in a move to draw foreign investors to support the naira, auction results showed on Thursday.

The naira gained sharply against the dollar on Wednesday, the day of the auction. The central bank had on Tuesday hiked interest rates and lifted restrictions on foreign investors participating in its fixed-income auctions.

The one-year bill was priced to yield 26.6%, similar to that at the central bank's last auction two weeks ago and higher than its benchmark rate of 24.75%.

The central bank is trying to boost liquidity on its currency market, which has suffered chronic dollar shortages, by offering attractive yields on debt to draw foreign investors.

Daily turnover has doubled to $200 million since a second currency devaluation in less than a year in January, but remains below the $350 million achieved in the first quarter of 2020.

"Overall, it is better ... you can source USD on the way out in commensurate size, but we are still not back to pre-2015 liquidity levels," said Samir Gadio, managing director and head of Africa strategy at Standard Chartered Bank in London.

The central bank offered to sell 142.2 billion naira of one-year notes but ultimately sold 1.134 trillion naira after receiving subscriptions worth 2.48 trillion.

It also increased its allotment for the 91-day and 182-day bills due to oversubscriptions.

(Reporting by Chijioke Ohuocha; Editing by Kevin Liffey)