Nigerian T-Bills Yield Slumps to 7.07%

Nigerian T-Bills Yield Slumps to 7.07%

With large exposure to inflation pressure, the average yield on the Nigerian Treasury bill bumped again as market participants intensified buying amidst a strong liquidity profile in the financial system.

Analysts said in their market updates shared with investors that the overnight lending rate contracted by 121 basis points to 1.36%, signifying the absence of liquidity pressures after significant inflows flooded the system.

From 2.21% in the previous day, the repo rate slumped to 0.93%, according to data from FMDQ Exchange. As a result, trading activities in the secondary market were bullish. The average or benchmark yield on Treasury bills instrument declined by 6 basis points to 7.07%.

Fund/Asset managers and other market participants are still earning inflation-exposed returns on their naira assets despite changing market dynamics – higher consume price index, and benchmark interest rate.

In its update, Cordros Capital Limited told investors that across the curve, the average yield declined at the short (-26bps) end, following demand for the 85-day to maturity (-102bps) bill.

Meanwhile, the mid and long segments remained unchanged due to a thin trading record.  Notably, the three-month Nigerian interbank borrowing (NIBOR) rate experienced a significant moderation of 285 basis points, declining to 11.85% from 14.70% recorded the previous day.  #Nigerian T-Bills Yield Slumps to 7.07%

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