Benchmark Yield on Nigerian T-Bills Falls to 7.6%

Benchmark Yield on Nigerian T-Bills Falls to 7.6%

The average yield on Nigerian Treasury Bills (NTB) slid after the Debt Management Office (DMO) on behalf of the Central Bank of Nigeria (CBN) conducted its primary market auction (PMA) on Wednesday.

The CBN sold Nigerian Treasury bills worth N35 billion across the 91-day, 182-day and 364-day maturities, according to its auction result. In the secondary market, however, the bullish trading activities extended further, pushing prices of short-term borrowing instruments higher while the yield curve retraced.

Traders said in the respective market updates that the average secondary market yield on Nigerian Treasury Bills cleared lower by 1 basis point due to bullish sentiment in the AUG-24 bills.

Asset managers and investors’ funds rotated around Treasury bills following unmet demand at the CBN auction despite inflation-exposed rates on naira assets. This happened on the back of liquidity movement in the financial system.

Patterns in the money market indicated that the Nigerian Interbank Offered rates closed higher across all maturity gauges, according to Cowry Asset Management report, even as the overnight interbank rates advanced by 0.29% points to reach 1.67%.

The asset manager said the northward movement comes as banks seek more liquidity for their funding obligations. Also, short-term benchmark rates such as the open repo rate (OPR) and overnight lending rate (OVN), closed higher at 1.00% and 1.67% respectively. 

Across the curve, Cordros Capital said the average yield was flat at the short end but expanded at the mid (+8bps) segment following profit-taking on the 106-day to maturity (-48bps) bond.

Conversely, the average yield contracted at the long (-6bps) end as players demanded the 316-day to maturity (-43bps) bond. Meanwhile, the average yield was flat at 12.1% in the OMO segment, according to fixed income analysts.#Benchmark Yield on Nigerian T-Bills Falls to 7.6% Naira Devaluation Deepens Economic Crisis in Nigeria