T-Bills Yield Dips 14bps as Inflation Pressures Moderate
The average yields on Nigerian Treasury Bills (NTB) falls 14 basis points (bps) in the secondary market on Tuesday as the nation’s headline inflation rate moderated 3 basis points to 15.60% in January 2022.
In the secondary market, trading activities result shows that the average yield on the Federal Government of Nigeria (FGN) bond dips three basis points ahead of Debt Management Office (DMO) N150 billion auction scheduled for tomorrow.
Meanwhile, short term rates decline further at the money market on account of solid liquidity in the financial system due to open market operations (OMO bills) repayment, causing the average interbank rate to dip.
Market data shows that the overnight lending rate decreased by 133 basis points to close at a single-digit low of 1.92 percent as against the last close of 3.25 percent. Read: Yield on Nigerian Treasury Bills Climbs 18 Basis Points
Also, the Open Repo rate decreased by 150 basis points to close at 1.50 percent compared to 3.00 percent on the previous day.
As system liquidity has improved with OMO repayment of ₦135.897 billion, FSDH Capital said in a note that the money market rates are likely to remain subdued, barring any mop-up activity by the Central Bank of Nigeria, CBN.
Today, the Nigerian Treasury Bills traded in the secondary market closed on a bullish note with average yield across the curve decreasing by 14 basis points to 4.29 percent from 4.43 percent on the previous day.
The average yield across the long-term maturities declined by 42 bps, according to a note from FSDH Capital Limited. However, the average yields across short-term and medium-term maturities remained unchanged at 3.69 percent and 4.24 percent, respectively.
NTB 8-Sep-22 (-127 bps) maturity bill witnessed buying interest, while yields on 8-day to maturity bills remained unchanged.
In the OMO bills market, the average yield across the curve closed flat at 5.30 percent. Average yields across short-term and long-term maturities remained unchanged at 5.41 percent and 5.24 percent, respectively.
FGN bonds secondary market closed on a mildly positive note today, as the average bond yield across the curve cleared lower by 3 bps to close at 11.44 percent from 11.47 percent on the previous day.
Average yields across medium tenor and long tenor of the curve declined by 7 basis points and 3 basis points, respectively, traders said in a market report. However, the average yield across the short tenor of the curve expanded by 5 basis points.
The 23-FEB-2028 maturity bond was the best performer with a decrease in the yield of 37 basis points, according to FSDH Capital while the 23-MAR-2025 maturity bond was the worst performer with an increase in the yield of 17 bps.
Tomorrow, the DMO is scheduled to offer FGN bond worth ₦150 billion through re-opening of 10-year (₦75 billion) and 20-year (₦75 billion) tenors, and the settlement will take place on February 18.
At the investors and exporters FX window, Naira appreciated by 0.16 percent as the dollar was quoted at ₦416.00 as against the last close of ₦416.67. Currencies traders said most participants maintained bids between ₦410.00 and ₦444.00 per dollar. #T-Bills Yield Dips 14bps as Inflation Pressures Moderate
