Nigerian Treasury Bills Yield Dips to 17.85% as Naira Assets Rally
The average yield on Nigerian Treasury bills moderated 4 basis points (bps) to 17.85% as secondary market demand for naira assets rose ahead of the midweek auction.
Investors ramped up demand for short-term local debt papers as the market anticipated fresh supply from the Central Bank of Nigeria (CBN) at the scheduled midweek auction.
Inflation is expected to moderate, pushing real investment returns lower ahead of the last 2026 monetary policy decision on the benchmark interest rate.
On Wednesday, the CBN will offer N800 billion worth of Treasury bills across standard tenors to keep money market liquidity in check.
Meanwhile, the market also expects inflows from expired Treasury bill papers. Analysts said excess liquidity will drive auction demand, though rates remain unaligned.
The authority expects N148.57 billion in Treasury bill repayments to hit the system and plans to sell N800 billion in replacement.
In the second market, demand for naira assets remained positive amid inflation, with Treasury bills in focus. Investors have been locking in yields in anticipation of repricing in spot rates.
Despite upward pressure across maturities, increased buying interest supported a bullish market tone, driving the average Treasury bills yield down 4bps to 17.85%.
Treasury bills yield contraction was most prominent at the belly of the curve, with the yield on the 3 Jun 2027 note declining by 30bps last week.
Investors were cautiously selective across maturities while sustaining their prior week’s bullish run, as investors continue to favour short-term instruments.
Investment analysts said primary market stop rates are expected to remain stable to firm as demand for short-term sovereign paper stays supported by strong system liquidity.
