Nigerian Treasury Bills Return Eased to 17.66%
Trading activities stay muted across the Nigerian Treasury bills curve in the secondary market, with the newly issued OMO bill attracting the most interest from eligible investors. The treasury bills yield has dropped by 100 basis points (bps) since the last week’s primary market auction.
The market has priced in sharp spot rates cuts signal from auction results as disinflation triggered asset repricing with the authority targeting lower borrowing costs amidst efforts to support fiscal performance.
With a soft bargain-hunting bias, the average yields declined by 2 basis points to 17.66% in the absence of a midweek primary market auction. Banks and other investors in the fixed income market have increased bets on the naira assets to compensate for declining yields.
Spot rates have continued to reduce as the Central Bank of Nigeria (CBN) began to price down the return on investment on risk-free assets as inflation pressures eased.
The treasury bills secondary market opened actively, driven by demand from the OMO auction, with the 17th February 2026 OMO maturity trading around 22.80% before closing at 23.14%.
Notable interest was seen in the November treasury bills at 16.39%, while July papers faced weak demand. Across the curve, the average yield declined at the short (-1 bp), mid (-2 bps), and long (-2 bps) segments, investment firm Cordros Capital Limited said in a note.
The yield contraction was driven by the demand for the 72-day-to-maturity (-1 bp), 114-day-to-maturity (-3 bps), and 226-day-to-maturity (-13 bps) bills, respectively.
In contrast, the average yield expanded by 2 bps to 24.7% in the OMO segment. Amidst declining spot rates, fixed-income yields moderated in the first half of 2025, particularly in the second quarter, driven by elevated system liquidity.
