Nigerian T-Bills Yields 10.9% amidst Squeezed Liquidity
Amidst a shift in risk sentiment in the fixed income market, the average yield on Nigerian Treasury bills was unchanged as trading activities in the secondary market ended on a quiet note yesterday.
The market witnessed lower trading deals as liquidity pressures continued to worsen after the apex bank lifted restrictions on the amount of deposit Nigerian banks can place in its standing deposit facility to earn interest.
In the money market, short-term benchmark rates are adjusted to liquidity dictate. Traders noted that the overnight lending rate expanded by 50 basis points to 16.5%, following the debits for the OMO auction worth N400.00 billion.
The Central Bank of Nigeria (CBN) recently resumed OMO sales to attract foreign interest, though the trend remains tightened as the country faces foreign exchange scarcity challenges.
Unimpressively, investors in the fixed income market space have seen their portfolios return depressed by the rising inflation rate while the naira depreciation continues to worsen interest in Nigeria’s investment market due to negative yield on assets.
Due to a cold outing in the treasury bills market, the average yield remained at 10.9%. Across the segment, the average yield was unchanged at the short and mid segments. However, analysts noted that yield pared at the long (-1bp) end as players demanded the 331-day to maturity (-1bp) bill.
Elsewhere, the average yield was flat at 12.0% in the OMO segment. The Nigerian Interbank Treasury Bills True Yield displayed upward movements for all tenors tracked. The average secondary market yield on Nigerian Treasury Bills closed flat at the end of Tuesday’s trading session. Investors Stake N653bn on Nigerian Sukuk -DMO