Nigerian Treasury Bills Yields Ease as Investor Demand Strengthens
The average yield on Nigerian Treasury bills fell to 17.80%, ahead of inflation, as investors continue to lock in positions after the midweek auction. Fixed-income investors continue to pile into naira assets, supported by elevated yields and moderating headline inflation.
Inflation is projected to fall below 14%, raising the odds of further monetary policy easing as the Central Bank of Nigeria (CBN) policy committee is scheduled to meet for its final meeting in late November 2026.
Last week, trading activities started calmly in the secondary market, with transactions concentrated in the OMO segment as investors showed selective interest in April maturities.
The 20-Apr OMO was quoted at 17.60%/17.25%, while trades were consummated on the 6-Apr paper at 17.20%. As the week progressed, attention shifted to the primary market auctions.
The CBN floated an OMO auction which attracted strong demand. Total OMO subscriptions reached ₦4.07 trillion against an allotment of ₦3.85 trillion, while stop rates settled at 17.44%, 16.68% and 15.99% across the three tenors.
At the midweek Treasury bills auction, the authority received subscriptions of N1.21 trillion and allotted ₦713.30 billion. Stop rates on the 91-day and 182-day papers held steady at 15.40% and 15.79%, respectively; the 364-day stop rate increased by 9bps to 15.89%.
Secondary market activity remained relatively quiet after both auctions, with the newly issued 11-Nov Nigerian Treasury bills quoted at 15.90%/15.70%, investment firm Comercio Partners said in an investor note.
Since the auction, the secondary market remained bullish. Reinvestment of unmet primary auction demand and sustained liquidity in the banking system supported the positive sentiment.
Towards the end of the week, selling pressure emerged across the curve as some investors reduced their bills and OMO positions ahead of the upcoming bond auction.
The Debt Management Office (DMO) decision to introduce shorter-dated bonds also encouraged some portfolio repositioning.
However, the market closed mildly positive, with the newly issued 11-Nov quoted at 15.85%/15.75% to close the week. The average benchmark yield fell 5bps week-on-week to 17.80%.
Primary auction yields are expected to remain relatively steady in the near term, guided by sustained investor appetite for short-dated fixed-income instruments and prevailing system liquidity levels. CBN Hikes 1-Year Nigerian Treasury Bill Rate to 15.89%
