Nigerian Treasury Bills Yield Eased as Banks Keep Holdings
The average yield on Nigerian Treasury bills eased slightly by 6 basis points (bps) week on week to 17.51% on Friday, as deposit money banks and other portfolio managers remain bullish.
With inflation running near 16% and the authority’s decision to keep the benchmark interest rate at 26.5%, the real return on naira assets has declined. Bargain hunting for T-Bills has persisted, though inflation is expected to rise further and, by market consensus, an interest rate hike is unlikely.
Fixed income market investors increased their bets on the naira asset last, dragging yields on Nigerian Treasury bills lower – still ahead of Nigeria’s headline inflation rate.
Traders said sentiment remained broadly stable, with a mildly bullish undertone, adding that investors continued to position aggressively amid elevated system liquidity.
Without banks’ demand for additional liquidity and asset managers’ strong appetite, the hunt for Treasury bills drove average benchmark yields lower by 6 bps week-on-week to close at 17.51%.
The elevated yield on the naira asset was sustained due to robust liquidity conditions in the money market, which remained firmly positive, according to investment analysts.
The financial system liquidity printed higher at ₦6.02 trillion, driven largely by increased placements at the Central Bank’s Standing Deposit Facility (SDF).
Short-dated instruments, according to traders, saw mild yield upticks as investors selectively adjusted their positions in near-term papers, while longer tenors eased slightly.
Trading activity was concentrated at the belly of the curve, where buying interest drove yields lower across key maturities, including Treasury bills that will expire in 17-Dec-26 (-41bps), 10-Dec-26 (-37bps), and 03-Dec-26 (-34bps).
This was partly offset by profit-taking at the longer end, with yields rising on Treasury bills that will mature on 11-Mar-27 (+22bps) and 18-Mar-27 (+16bps). GTBank Sets $20K Quarterly Spending on Naira Debit Card

