Market Keeps Yield on Nigerian T-Bills Below 7%

Market Keeps Yield on Nigerian T-Bills Below 7%

In the secondary market, there were cold trading activities, steadied positioning in Nigerian Treasury bills ahead of the Central Bank midweek primary market auction.  The apex bank would roll over maturing bills, and analysts are predicting that spot rates could rise further. 

At the last auction sales in July, just after the monetary policy committee raised the benchmark interest rate by 25 basis points, the apex paid higher rates on treasury bills issued to attract private funds.

Spot rate on 364-day Nigerian Treasury bills rose to 12.15%, marking a significant uptick from the average 6% it had offered.  While some fixed income market analysts are projecting that spot rates could rise further, reversing previous financial repression where government borrows at steeply lower rates, liquidity side poses a threat.

Yesterday, liquidity pressure began to resurface, though analysts said local banks’ participation at the CBN standing lending facility remains minimal.

Key money market rates: The open repo rate (OPR) and the overnight lending rate (OVN) experienced upward movements to 5.90% (from 5.83%) and 7.2% (from 6.83%), respectively.  

Meanwhile, the Nigerian Interbank Treasury Bills True Yield (NITTY) observed a downward trend across most maturities, driven by demand pressure, which pushed yields lower. The average secondary market yield on T-bills remained at 6.96%. #Market Keeps Yield on Nigerian T-Bills Below 7% Naira Devaluation Deepens Economic Crisis in Nigeria