Nigerian Treasury Bill Yield Eased Seven Basis Points to 0.37%

Nigerian Treasury Bill Yield Eased Seven Basis Points to 0.37%

Nigerian Treasury Bill yield eased seven basis points (bps) on Wednesday to 0.37% amidst robust financial system liquidity.

Despite 15 consecutive months inflation rate uptrend recorded, yield on gilt-edged securities have been on decline across markets.

The negative return has however triggered some sort of apathy as fixed income investors scrabble for high yield.

On Wednesday, interbank liquidity remained robust with excess liquidity in the financial system opening at N1.25 trillion from N1.24 trillion in the previous session.

As a result, funding rates remained stuck at low single-digit and closed slightly lower.

Notably, the Open Buy Back (OBB) and Overnight (OVN) rates declined by 25bps apiece to 0.38% and 0.75% respectively.

“We expect funding pressures to remain benign in the near term, barring a major cash reserve ratio debit by the central bank”, Chapel Hill Denham hinted in a note.

The fixed income market traded mixed with short term rates trading bullish on the back of the substantial excess liquidity in the financial system.

Meanwhile duration apathy remained amid uncertainty on the direction of monetary policy and interest rates.

At the front end of the curve, the Nigerian Treasury Bills and Open Market Operations (OMO) benchmark curves eased by 7bps and 6bps to 0.37% and 0.63% respectively.

However, the benchmark bond yield curve expanded by 5bps to 6.57%.

In the currency market, the Naira weakened against the United States dollar in the Investors & Exporters Window by 4.0% or N16.42 to 410.25.

The local currency however closed flat in the official window at 379.00, and the parallel market rate was unchanged at 470.00.

External reserves sustained uptrend in the New Year, rising by 1% month-to-date to US$35.72 billion on 05 January 2021, reflecting the impact of foreign currency loan inflows.

Nigerian Treasury Bill Yield Eased Seven Basis Points to 0.37%