Nigerian Treasury Bills Yield Dips to 18% Ahead of CPI Data
The average yield on Nigerian Treasury bills slid to 18.01% in the secondary market as investors’ interest in the naira asset increased ahead of the consumer price index (CPI) data scheduled for release.
The Treasury market experienced bargain hunting across the short and belly of the curve in a soft on-the-day rally that dragged the average yield lower by a basis point on Monday.
Due to buying interest, both the short and mid (-2 bps) segments of the curve recorded 2 basis point yield contractions, CardinalStone Securities Limited said in its market update.
Traders reported that an improved system liquidity supported buy interest on select maturities. Demand was particularly evident on the 7-Jan-27 bill, where the discount rate declined by 7 bps to a 17.94% discount, AIICO Capital Limited said.
The investment firm noted that these gains were partly offset by profit-taking and sell pressure on other papers, like the 5-Nov-26 bill, which saw a notable selling interest, with the rate rising by 10 bps to 17.05%.
Broadstreet projects disinflation reversal for December due to base effects. Nigeria’s headline inflation is projected to cross 30% as a result of distorted numbers comparison, from 14.45% in November.
If happens, the monetary policy authority will likely keep interest rates at double digit high despite rising default rate in the banking sector – with nonperforming loans standing above regulatory benchmark of 5% already. Naira Drops to N1,419 Amidst Broad Stability Projection
