Nigerian Treasury Bills Yield Dips as CBN Reprices Rates
The average yield on Nigerian Treasury bills declined to 17.76% in the secondary market as investors stepped up bargain hunting on the naira asset, traders said in separate fixed income market updates.
Broadstreet analysts highlighted that returns on the short-term investment securities remain elevated, and expanding real returns continue to attract interest across the board amidst sustained disinflation.
With significant holdings by Nigerian banks, pension managers, and other institutional investors, the yield on naira assets continues to fluctuate but still provides a hedge against Nigerian inflation.
Fixed-income market analysts reported that the Nigerian Treasury Bills True Yield (NITTY) curve moved higher across most tenors as investors demanded higher returns, particularly ahead of the primary market auction.
Yields on the 1-month, 3-month, and 6-month instruments rose by 5bps, 32bps, and 7bps, respectively, Cowry Asset Management Limited said, while the 12-month tenor declined by 34bps, indicating stronger demand at the longer end.
This reflects a typical strategy where investors try to lock in attractive yields for longer periods when rates are still relatively high, the investment firm said in an update.
During the early trading session, trading activity in the secondary Treasury bills market was relatively muted, as attention shifted to the primary auction.
Nonetheless, mild buying interest at the mid- to long-end of the curve supported the market, leading to a 19 basis points decline in average yield to 17.76% week-on-week.
According to Cowry Asset, the drop was largely driven by demand following the lower stop rates observed at the midweek auction.
At the midweek auction conducted by the Central Bank, Nigerian Treasury bills totalling ₦400 billion was offered across standard tenors.
Reflecting appetite for the naira curve, investor demand was exceptionally strong, with total subscriptions reaching ₦3.1 trillion—almost eight times the offer size—largely concentrated on the 364-day instrument.
Based on the auction result, total allotment came in higher at ₦693 billion. Stop rates reflected a slight easing in yields, as the 91-day rate held steady at 15.95%.
Meanwhile, the 182-day and 364-day rates declined by 20 basis points each to 16.42% and 16.43%, respectively, reinforcing the strong demand for longer-dated instruments. CBN Hikes Rate on OMO Bills, Raises N1.75 Trillion
