Nigerian Treasury Bills Yields Decline as Rates Hit 2026 Low
The average yield on Nigerian Treasury bills declined by 90 basis points (bps) in the secondary market as investors increased bets on naira assets, prompting sharp repricing.
The financial market witnessed a sharp decline in the benchmark interest rate, which affected fixed-income asset pricing in the debt market as real interest rates moderated.
The Central Bank committee reduced policy rates by 350 basis points in a surprise move that most Broadstreet analysts had not anticipated. A day later, the authority reduced spot rates across standard treasury bill tenors below 18%, the lowest in 2026.
Trading activity was aggressively bullish in the secondary market after the momentary easing, with strong buying interest across the yield curve.
The strongest repricing occurred at the longer end, where yields contracted by 29bps, 114bps and 123bps across selected maturities, according to a report released by Cowry Asset Limited.
Consequently, the average yield on Nigerian Treasury securities declined by 90 bps, reflecting a rapid adjustment in market yields to the new monetary policy.
At the midweek auction for Nigerian treasury bills, the CBN offered N600 billion across the 91-day, 182-day and 364-day maturities, attracting an impressive N4.2 trillion in subscriptions.
Despite the strong demand, the Apex Bank allocated N497 billion.
Stop rates fell sharply across all tenors, declining by 80 bps to 180 bps for the 91-day, 70 bps to 170 bps for the 182-day, and 63 bps to 163 bps for the 364-day instrument. The significant decline in stop rates underscores the extent of the market repricing following the CBN’s easing decision.
Demand was equally robust at the OMO auction. The CBN offered N1.0 trillion across the 68-day, 152-day and 180-day maturities, attracting N6.1 trillion in subscriptions, representing approximately 6.1x the amount offered.
The CBN ultimately allotted N2.3 trillion. No allotment was recorded for the 68-day instrument, while the 152-day and 180-day bills cleared at 17.29% and 16.99%, respectively.
The strong demand for OMO securities despite falling yields highlights investors’ willingness to lock in prevailing returns before further monetary-policy transmission pushes short-term rates lower. Excess Liquidity in Banking System Climbs 73%, Rates Mixed
