UPDATE 1-Ghana 3-year bond oversubscribed, yield falls

* Bond oversubscribed five-fold

* Yield falls to 16.7 pct from 21 pct

* Cedi gained ahead of auction (Adds quotes, details)

ACCRA, Jan 10 (Reuters) - Ghana accepted 402 million cedis ($213 million) in bids for its three-year bonds at an oversubscribed auction on Thursday, with the average yield dipping to 16.7 percent from 21 percent at the previous sale, the central bank said.

The West African cocoa, gold and oil exporter received a total 2.2 billion cedis worth of bids but stuck closely to an advertised target of 400 million cedis, the bank's head of treasury, Adams Nyinaku, told Reuters.

"It (auction) was highly successful but we didn't want to take more than we needed," Nyinaku said, adding that the auction was intended to settle maturing debts. He said 99 percent of total accepted bids came from offshore investors.

Ghana's local cedi currency gained more than 1 percent in the past week as foreign exchange dealers anticipated the bond would draw an influx of greenbacks.

Thursday's auction was the first medium-term bond since a Dec. 7 election won by President John Dramani Mahama under protest from the opposition, which has launched a court battle to overturn the result.

Nyinaku said yields on the bids received at the auction ranged between 16.7 percent and 22 percent. (Reporting by Kwasi Kpodo; Editing by Richard Valdmanis, Ron Askew)