Nigerian Treasury Bills Yield Jumps by 108bps to 25.12%
The average yield on Nigerian Treasury bills (NTB) increased sharply due to a heated selling rally by local deposit money banks in the secondary market on Wednesday in an effort to boost liquidity.
Due to rapid selloffs by some banks across the mid- and long-end of the curve by investors, the average yield declined by 100 basis points. The bearish trend followed a benchmark interest rate hike at the end of the monetary policy committee of the Central Bank of Nigeria’s two day meeting.
The CBN hiked the benchmark interest rate by 25 basis points to 27.50% at its last meeting for 2024. Hence, the market expects yield repricing due to the elevated inflation rate.
Investors raised bets on Treasury bills at the belly of the curve with the hope to optimse returns. There were bullish sentiments for the October and November papers, particularly the 23 October and 20 November 2025 NTBs.
At the last Treasury bills auction, the Debt Management Office increased spot rates on 364-day Treasury bills instruments by 50 basis points to 23.50%. Thereafter, there was increased demand for one-year Treasury bills paper at the secondary market by investors who lost their bids at the main auction.
The market is still earning 6.38% negative real return on fixed interest securities as inflation printed at 33.88% against the benchmark interest rate of 27.50%.
On Wednesday, the Nigerian Treasury bills secondary market traded with bearish sentiments as the average yield expanded by 108bps to 25.12%. In a market update, Cordros Capital Limited said across the curve, the average yield expanded at the short (+149bps) and long (+152bps) ends.
Fixed income market said the yield expansion was driven by profit-taking activities on the 8-day to maturity (+223bps) and 288-day to maturity (+313bps) bills.
However, yield contracted at the mid-(-2bps) segment due to the demand for the 176-day (-2bps) bill. Elsewhere, the average yield dipped by 2bps to 27.2% in the OMO segment. #Nigerian Treasury Bills Yield Jumps by 108bps to 25.12% Naira Plunges on Suboptimal FX Intervention
