Nigerian Treasury Bills Yield Climbs to 18.81% Amidst Repricing
The average yield on Nigerian Treasury bills rose 2 basis points to 18.81% in the secondary market on Monday as investors trimmed holdings at the short end of the curve.
The market saw buying interest in the belly and long end of the curve but was weighed down by pressure at the short end, which recorded a significant spike in associated yield.
At the short end, yield surged +13bps, and this was more than offset by contractions at the mid (-1bp) and long (-3bps) segments of the curve. Average yields subsequently closed 2bps higher at 18.81%, CardinalStone Securities Limited said in a report.
The market continues to react to lower spot rates on one-year Treasury bills amidst a slowdown in headline inflation and widening real returns on naira assets in the debt capital market.
Last week, the CBN offered N750 billion across the 91-day, 182-day and 364-day maturities, attracting total subscriptions of N3.4 trillion.
Ultimately, the authority allotted N865.7 billion, reflecting strong investor demand. Stop rates for the 91-day and 182-day bills remained unchanged at 16.30% and 16.50%, respectively, while the 364-day stop rate declined by 31bps to 16.84%.
The decline in the longest tenor suggests continued investor preference for locking in relatively attractive yields at the longer end of the Nigerian Treasury bills curve.
The OMO auction floated attracted significant investor interest. The CBN offered N1.0 trillion across the 91-day, 147-day and 154-day maturities. Total subscriptions surged to N5.5 trillion, representing a 5.5x bid-to-offer ratio.
The CBN allotted N2.9 trillion, well above the amount initially offered, underscoring strong investor demand for short-term sterilisation instruments. Stop rates settled at 19.59% for the 91- day bill, while the 147-day and 154-day instruments both cleared at 18.99%.
This week, approximately N3.07 trillion in OMO maturities are scheduled to settle next week, alongside N71 billion in NTB maturities, resulting in an estimated N3.14 trillion liquidity injection into the financial system.
Liquidity conditions are likely to tighten modestly as the CBN proceeds with its planned N700 billion NTB auction, with settlement expected to absorb liquidity from the system. This could be partly offset by over N700 billion in expected OMO maturities, which should provide some liquidity support. Nigeria’s Total Trade Rises 5.2% in Q2 2026 – NBS
