OMO, Treasury Bills Yields Fall Ahead of Q3 Borrowing Plan
OMO and Nigerian Treasury bills yields fell apiece in the secondary market as buying momentum persisted ahead of the third quarter local borrowing plan.
On a gradual scale, yields on fixed interest securities across tenors have been in decline amidst decelerating headline inflation rates—which has been affecting real return on investment in the debt market.
The decision to keep the monetary policy rate at a double-digit high has widened the real return on investment in the debt market to approximately while inflation moderated further.
With a substantial gap between the headline inflation rate (22.79%) and Nigeria’s interest rate benchmark of 27.50%, the market has seen increased buying actions that plunge yield downward sharply in the second quarter.
The Treasury bills market opened quietly after the Central Bank of Nigeria (CBN) announced an OMO auction, with only limited trading activity across maturities.
The CBN offered ₦600 billion across 113-day and 260-day maturities. The OMO bills recorded a total subscription of ₦771.65 billion. The CBN, however, allotted ₦745.40 billion for 260-day OMO bills. Notably, no 113-day bills were sold, while the 260-day tenor cleared at 23.99%.
Debt market analysts said the current cautious mood is likely to continue as investors wait for clarity from the Q3 2025 borrowing plan. Hence, the average yield on Nigerian Treasury bills contracted by 3 bps to 20.2%, Cordros Capital Limited said in a note.
The investment firm said across the curve, the average yield contracted at the short (-2 bps), mid (-4 bps), and long (-2 bps) segments. The contraction in yields was driven by the demand for the 80-day to maturity (-3 bps), 143-day to maturity (-10 bps), and 339-day to maturity (-22 bps) bills, respectively.
Similarly, the average yield contracted by 6 bps to 26.4% in the OMO segment. Nigeria’s debt office and the CBN are expected to release third quarter primary market auctions calendar in the coming days #OMO, Treasury Bills Yields Fall Ahead of Q3 Borrowing Plan Headline Inflation Rate Reduces to 22.97% in May – NBS
