Nigerian Treasury Bills Rally as Markets React to Rate Cut

Nigerian Treasury Bills Rally as Markets React to Rate Cut

Nigerian Treasury bill yields declined as investors ramped up naira assets in reaction to the Central Bank decision to cut rates, a move anticipated to result in lower rates on debt instruments.

In the secondary market for Treasury bills, strong buying interest persisted across the short, mid, and long ends of the curve, dragging the average market yield down. 

The bullish momentum came in reaction to the monetary policy committee’s 50 basis point interest rate cut last week.Hence, some market participants, fixed-interest securities investors, quickly locked in yield in anticipation of rates repricing across the financial markets.

Analysts reported that the bargain hunting was largely supported by abundant system liquidity and the MPC’s 50bps reduction in the MPR to 27.00% alongside the corridor adjustment to +250/-250.

Early in the week, yield declines across the curve, while midweek saw some mixed sentiment as selective selling lifted the 03 Sept 2026 paper by 40 bps, AIICO Capital Limited said in a note.

The firm noted that strong buying interest resurfaced toward the close of the week, leading to notable repricing at the long end, where yields dropped sharply by up to 115bps.

 Similarly, the OMO segment mirrored this bullish tone, benefitting from sustained liquidity and the absence of new CBN issuance, with heavy demand seen on key maturities.

Reflecting the trading direction, the Nigerian Treasury bills and OMO yields declined by 49 bps and 34 bps to 18.0% and 21.7%, respectively.As such, the average yield decreased by 45 bps week on week to 19.8%, Cordros Capital Limited reported.

“Given our projections of a sustained liquidity surplus, augmented by the recent 50 bps MPR cut, which strengthens the case for accommodative monetary conditions, we expect robust demand for bills to persist, driving yields lower,” Cordros Capital Limited stated.

Analysts expect market sentiment to be in line with available system liquidity conditions. # Nigerian Treasury Bills Rally as Markets React to Rate Cut. #Nigerian Treasury Bills Rally as Markets React to Rate Cut#

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