Nigerian Treasury Bills Yield Tapers Ahead of N400bn Auction
The average yield on Nigerian Treasury bills declined by 15 basis points (bps) to close at 20.90% in the secondary market as investors’ appetite for the naira assets increased ahead of the Central Bank primary market auction on Wednesday.
Fixed income market analysts said higher inflation numbers in March seemed to dampen hopes for a dovish monetary policy in the near term. The latest report on Nigeria’s consumer price index (CPI) shows that in March 2025, the headline inflation rate rose to 24.23% relative to the February 2025 headline inflation rate of 23.18%.
The disinflation effectively reduced the market real return on investment to 3.27% in the debt capital market. However, market activities reflected renewed buy-interest from offshore investors, with onshore investors tilting toward a more cautious approach.
Across the market segments, the average yield declined by 15 bps and 107 bps to 20.9% and 28.2% in the NTB and OMO bills segments, respectively. The treasury bills rally was fueled by renewed buy-side interest at both the short and long ends of the yield curve.
According to investment banking firms in their separate reports, this buying appetite for government securities drove the average yield on treasury bills lower by 15 basis points over the week, closing at 20.90%.
Fixed income traders attributed the latest rally to investors repositioning strategies amid expectations of moderated yield levels in the near term. Demand was bolstered by improved liquidity in the financial system and investor demand for long-dated maturities—particularly December 2025 and February and March 2026 papers.
The rally at the long end saw yields trend downward consistently. Despite a quieter session midweek with mostly retail-sized trades, demand for longer tenors persisted.
Earlier in the week, the mid-rate had dropped as low as 19.50% due to active buying interest before settling slightly higher by week’s end. Modest supply from offshore players was met with healthy local demand, resulting in moderate activity across the curve.
The market anticipates an improvement in the demand for bills in the new week will cause yields to taper slightly. The CBN is scheduled to conduct a primary market auction on Wednesday where N400 billion worth of Nigerian Treasury bills will be offered for subscriptions. #Nigerian Treasury Bills Yield Tapers Ahead of N400bn Auction GCR Affirms Dangote Cement AA+ (NG) Rating
