Rising Appetite for Treasury Bills Drags Yield Down
The average yield on Nigerian Treasury bills decreased as portfolio investors became more interested in naira assets in spite of negative interest rates and concerns about inflation. There was a surge in demand on the secondary market for bills with a maturity duration of 24 days and 171 days. Demand for long dated bills was relatively quiet.
In the OMO bills space, a similar pattern was observed. Investors’ appetite for OMO bills improved following lost bids at primary market auction conducted last week. Due to the bullish sentiment, as the average yield declined slightly, down by 2 basis points to 21.7%, according to traders.
Across the curve, Cordros Capital Limited told investors via email that the average yield contracted at the short (-3bps) and mid (-3bps) segments. The contraction in yields followed buying interests in the 24 day to maturity, whose yield shed 4 basis points, and 171-day to maturity bills with a 4 basis point decline in yield.
The yield stayed flat at the long end. Similarly, the average yield dipped by 4 basis points to 21.4% in the OMO bills segment in the secondary market. In the money market, pressures in the financial system persisted. Due to level of liquidity pressures, short term benchmark interest diverged.
The interbank rates— diverged with open repo rate, which increased by 9 basis points to 29.19%. However, the overnight lending rate contracted by 12 basis points to 29.82% in the absence of any significant inflows into the system. #Rising Appetite for Treasury Bills Drags Yield Down FMBN Inaugurates Task Teams for Loan Recovery Nationwide
