Nigerian Treasury Bills Yield Jumps after CBN Cuts Spot Rate
The average yield on Nigerian Treasury bills jumped by 20 basis points in the secondary market as investors switched to trim their portfolio holdings following reduction in the spot rate pricing on one year bills offered by the Central Bank at the main auction.
Amidst the bearish play, some investors sought to fill bid that were rejected by the Central Bank at the midweek auction in the secondary market on Thursday, heating up trading activities.
Demand were seen at mid and far-dated papers after the CBN keep spot rates on 91-day and 182-day treasury bill unchanged but reduce rate on 364-day. Increased activities was further supported by a net auction settlement of N374.20 billion. According to analysts notes, trading activities were concentrated on the newly issued 1-year Nigerian Treasury bills maturing in 26 Mar 2026.
Meanwhile, profit-taking dominated as participants looked to capitalize on recent gains, pushing the average benchmark Nigerian Treasury bill mid-rate up.
In its investors note, TrustBanc Financial Group Limited said market players took profits on their auction winnings, leading to slight moderation in yields at the far-end of the curve while pushing yields higher at the mid-end.
Treasury bills maturing on 4-Sept advanced by 107 basis points as investors offload their buckets. Overall, the average benchmark yield rose by 20bps to close at 19.36%. “We expect prevailing market conditions to persist, albeit at a moderate pace as market players continue to digest the signals from the primary market auction”.
Across the curve, the average yield expanded at the short (+4bps) and mid (+73bps) segments. The yield surge was driven by selloffs of the 91-day to maturity (+27bps), and 147-day to maturity (+110bps) bills, respectively.
Meanwhile, yield contracted at the long (-1bp) end driven by demand for the 329-day to maturity (-1bp) bill. Similarly, the average yield advanced by 16bps to 22.7% in the OMO segment. #Nigerian Treasury Bills Yield Jumps after CBN Cuts Spot Rate Tariff hike: Court Delivers Judgment in MultiChoice, FCCPC’s Legal Dispute May 8
