Treasury Bills Yield Shrinks Ahead of N700bn Auction
The average yield on Nigerian Treasury bills fell below 22% in the secondary market ahead of auction. The bills market traded on a relatively quiet note with a mild bullish bias as market players assessed signals from the latest inflation report.
Yields moderated slightly across the curve, particularly at the long end of the curve, due to buying momentum on naira assets, according to analysts notes reviewed by MarketForces Africa.
The market experienced increased bullish momentum after the release of the highly anticipated rebased consumer price index figures for January 2025. The latest reading revealed a notable drop in headline inflation by over 10% in absolute terms to 24.48%, compared to December 2024’s figure of 34.80%.
As a result, rates fell significantly across the curve, especially for long-dated securities. The average benchmark yield declined by 9 bps to close at 21.93% ahead of the midweek primary market auction. Across the curve, the average yield contracted at the short (-1 bp), mid (-1 bp), and long (-12 bps) segments, Cordros Capital Limited said in an investor’s note.
The contraction in yield was attributed to demand for the 79-day to maturity (-1 bp), 170-day to maturity (-1 bp), and 289-day to maturity (-90 bps) bills, respectively. Similarly, bargain hunting was spotted at the OMO Bills segment following N10 billion from OMO repayment. Hence, the average yield contracted by 49 basis points to settle at 25.9% in the OMO bills segment in the secondary market.
On behalf of the Central Bank of Nigeria, the Debt Management Office, DMO, is scheduled to offer ₦700 billion across the 91, 182, and 364-day papers. Fixed income market analysts anticipate subdued trading activity in the secondary market as participants prepare their bids for the auction. #Treasury Bills Yield Shrinks Ahead of N700bn Auction Naira Dives Low as Data Shows FX Inflows Fall by 62%

