Bond Yield Steadies at 17.25% After Interest Rate Hike
Benchmark yield on Nigerian government bond steadied at 17.25% due to cold trading activities in the secondary market. The yield curve has inverted amidst rising headline inflation rate in the country. Recently, benchamrk interst rate increased by 4% to 22.75%.
Accoting to fixed interest securities traders, real return, interest yield on FGN bond stayed negative due to rising pressures from worsening consumer price index. Yield repricing has been slowed but analysts are now expecting adjustment following interest rate hike at the CBN February meeting.
Some market analysts however believe risk free insturments like Federal Government of Nigerian bonds and other borrowing tools should not attract premium rate. They noted that investors take no risk investing in government instruments with near zero default.
Data from fixed interest securities market indicates yield on short-term instruments is contesting for strength against bond rate in the market. The average yield on Nigerian Treasury bills has already crossed 17%. Also, OMO bills yield has been 18% on the average over past days,
In the secondary market for FGN bonds, trading activity was on a cautious thread, as the average yield stayed muted at 17.25%, Cowry Asset Management Limited told investors in an email update. This happened despite yield expansions of 3 basis points and 2 basis points in the MAR-25 and JAN-26 FGN bonds which experienced mild selloffs
Across the curve, Cordros Capital Limited told investors that the average yield inched higher at the short (+1bp) end, following profit-taking activities on the MAR-2025 (+3bps) bond but was unchanged at the mid and long segments. #Bond Yield Steadies at 17.25% After Interest Rate Hike Naira Suffers Big, CBN Goes Ballistic Against FX Whales
