Investors Offload Nigerian Treasury Bills after Discount Rates Surge
The average yield on Nigerian Treasury bills (NTBs) increased due to sell pressures after the authority hiked spot rates across standard tenors at the midweek auction.
Investors’ reaction has been negative amid rising inflation, while the policy rate has been kept unchanged as Nigeria seeks to make risk-averse investors comfortable with elevated yields on naira assets.
Nigeria’s headline inflation surged to 15.93%, triggering spot rates repricing amidst heavy subscription, with one-year treasury bills pricing at 17.34%, MarketForces Africa reported on Wednesday.
In the secondary market, investors continue to take profit, reflecting risk-off sentiment, the same development in the equities space, which suggests macro pressures on investment sentiment.
The average yield increased by 2 bps to 17.91%, indicating continued repositioning following the auction, Lagos-based investment firm Meristem Securities Limited said in its commentary note.
Fixed income market analysts said sell-offs were concentrated in the mid-end of the curve, particularly in Treasury bills that will expire in FEB-2027 (+28bps, +37bps), MAR-2027 (+38bps, +31bps, +35bps), and APR-2027 (+72bps).
However, buying interest remained evident across the curve, with most instruments recording a 1 bps decline in yields; Meristem Securities Limited told investors in its note. #CBN Hikes Interest Rates on Treasury Bills to 17.34%
