Nigerian Treasury Bill Yield Climbs to 23%
The average yield on Nigerian Treasury bills climbed as investors dumped more naira assets in the secondary market ahead of inflation data.
Inflation is expected to decelerate, though analysts have started to place caveat on disinflation expectation due to increase pump price of petroleum.
With inflation rate remaining high, investors are earning negative interest yield despite monetary policy tightening. In style, Nigeria’s debt managers adjusted spot rates on Treasury bill to accommodate the changing market dynamics.
Ahead of next Treasury bills auction, fixed incomes analysts have however expressed diverged view on spot rates pricing on government borrowing instruments.
Investment bankers at AIICO Capital Limited said the treasury bills market started the week with a mixed to bearish tone due to tight system liquidity.
Analysts said selling interest was evident in the mid-and long-term papers, particularly in the March 2025, April 2025, and some September 2025 papers.
Across the curve, the average yield declined at the short (-3bps) and mid (-4bps) segments, analysts at Cordros Capital Limited said in a report.
The yield declined due to demand for the 66-day to maturity (-4bps) and 171-day to maturity (-5bps) bills, respectively. Meanwhile, the average yield expanded at the long (+34bps) end due to profit-taking activities on the 332-day to maturity (+199bps) bill.
Elsewhere, the average yield declined by 4bps to 24.6% in the OMO segment. In September, the Central Bank of Nigeria (CBN) held three rounds of Treasury bills and two rounds of OMO auctions to manage excess liquidity.
For NTB, yield varied across different tenors, with the 91, 182, and 364-day bills closing at 17.0%, 17.5% and 20.0% respectively, down 1.2 percentage points (ppts), 1.7ppts and 0.9ppts from August, Afrinvest said in a note.
Investor demand for NTBs remained steady, particularly for the longer-tenor bills, as investors sought to hedge against rising inflation.
Concurrently, the CBN actively used OMO auctions as a liquidity management tool, withdrawing ₦712.5 billion from the system to moderate excess liquidity and curb inflationary pressures. #Nigerian Treasury Bill Yield Climbs to 23%
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