Bonds, T-Bills Yields Steady as Interbank Rates Slowdown
Bonds, Treasury bills yields were left unchanged on Monday in the secondary market as pressures on interbank rates eased amidst an improved, robust financial system.
Last week, cash reserve ratio debits melted on Nigerian banks for failing to meet the Central Bank 65% loan to deposit ratio target hiked interbank rates at the weekend.
However, data from the FMDQ platform shows that both open buy back and overnight lending rates witnessed a slowdown in a fresh recovery.
Specifically, the overnight lending rate contracted by 500 basis points to 8.5% after closing the week at 13.5%, the situation analysts at Cordros Capital limited attribute to the absence of any significant funding pressures on the system.
Open buy back also tumble 500 basis points to 8% as data from foreign exchange markets shows that the Nigerian local currency record mixed outturn on Monday.
In the investors and exporters window, the naira appreciated by 0.1% to N411.13 a dollar but depreciated by 0.4% to N532 in the parallel market as demand for the greenback increase amidst lower FX supply.
As fixed income space continues to trend unimpressive, the Nigerian Treasury bills secondary market traded flat on Monday as the average yield was unchanged at 4.6%.
Similarly, the average yield at the open market operations (OMO) segment was flattish at 6.1% as Central Bank maintains low issuance with the managed position as the government seeks foreign currency raise in the second half of the year.
Also, government bonds trading activities in the secondary market see a mixed outing as the average yield in the space closed flat at 11.0%.
Read Also: Interbank Rates Slow Down as Naira Appreciates
Analysts at Cordros Capital said in its market report that across the benchmark curve, the average yield expanded at the short (+4bp) end as investors sold off the JAN-2026 (+14bps) bond.
Conversely, the average yield contracted at the mid (-3pbs) and long (-1bp) segments due to demand for the JUL-2034 (-4bps) and MAR-2036 (-6bps) bonds, respectively.
Bonds, T-Bills Yields Steady as Interbank Rates Slowdown
