Nigerian T-Bills Demand Surges Amid Disinflation, Rates Cut
The average yield on Nigerian Treasury bills slumped further, down 14 basis points in the secondary market, as investors ramped up naira assets after failed bids at the midweek auction.
Spot rates repricing persisted at the primary market auction conducted by the Central Bank of Nigeria (CBN) on Wednesday, with about N3 trillion subscription level on record.
Disinflation has widened real return on investment, fuelling surging demand for the naira asset – effectively hedging against double digit consumer price index for risk averse investors.
The midweek auction was significantly oversubscribed, but allotment was below target, and the monetary authority reduced spot rates across 182-day and 364-day bills.
The funds from failed bids flowed into the Treasury bills market on Thursday, dragging the average yield lower as Treasury bill prices rose amid increased secondary-market demand.
The average Treasury bill yield moderated by 14bps to 17.43%. Investors, positive sentiment was evident across the curve; however, it was more pronounced in maturities between July 2026 and November 2026, inclusive, resulting in yield moderation of over 30bps each.
Trading was light at the short end of the curve as investors adopted a cautious stance, leading to selective buying. Slight buying pressure was observed on some mid-tenor bills.
The 09-Jul-26 bill yield compressed by 24bps to close at 15.70%, while the 06-Aug-26 and 08-Oct-26 bills saw stronger buying interest, with yields declining by 33bps to 15.77% and 47bps to 15.94%, respectively.
The 07-Jan-27 bill also edged lower by 4bps to 16.25%. Most other maturities across the short and long ends of the curve remained unchanged. South African Rand Climbs Amid Soft Manufacturing Output
