Nigerian Treasury Bills Yield Tumbles to 5.3%
Treasury bills

Nigerian Treasury Bills Yield Tumbles to 5.3%

The average yield on Nigerian Treasury bills (NTB) declines further by eight basis points on Tuesday over market players sustained bullish move that started late last year despite 500 basis points interest rate hikes.

According to market reports, Treasury yield printed at 5.3% on first trading session in the fixed income market amidst healthy liquidity position in the financial system. Yield had printed at about 11% following a bearish run seen sometimes in November, 2022.

The Nigerian market is seen large positioning in both equities and fixed income market, which signal possibility of excess liquidity in the local economy. In 2022, due to heavy investment in value stocks, Nigerian bourse return spikes to 20%.

Meanwhile, short term rates nosedived to single digit level following improved inflows from matured financial asset that hits the system resulting in reduction in interbank rate, according to market data.

Data from FMDQ Exchange platform shows that the overnight lending rate contracted sharply, falling by 150 basis points to 9.8% after N10 billion OMO maturities hits the system.

MarketForces Africa reported that the average yield on Nigerian Treasury instruments has declined by 283 basis points to 5.41% at year-end in the financial year 2022. >>Nigeria’s Debt Office Opens Savings Bonds at 10.6%

Also, the average open market operation (OMO) bills yield declined by 578 basis points to close at 4.31%, further exposing naira assets to high inflation rate. The CBN is expected to release treasury auctio calender later in the month.

Across the curve, traders at Cordros Capital said the average yield contracted at short (-21bps), and long (-1bp) ends. This happened following buying interests in the 86-day to maturity (-127bps) and 324-day to maturity (-1bp) bills, respectively.

Conversely, the average yield was unchanged at the mid segment. In the OMO segment, the average yield closed flat at 3.4%. # Nigerian Treasury Bills Yield Tumbles to 5.3%

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