T-Bill Records Upward Yield Repricing as Naira Falls
Trading in the Nigerian Treasury Bill (NTB) secondary market closed on a bearish note, as the average yield expanded by 13 basis points on Tuesday to close at 6.7%. Amidst quiet trading in the fixed income space, the Nigerian local currency, naira falls at the Investors and Exporters Window.
Yields repricing in the fixed income market slowed down in the second quarter amidst the declining inflation rate and the monetary policy decision to hold key rates.
Cordros Capital said in its market report that the average yield on Treasury instruments traded flat across the benchmark curve as the fixed income market remains largely quiet.
Analysts stated that the average yield was flat at the short and mid segments but expanded at the long (+10bps) end due to sell-offs of the 359 day to maturity (+945bps) bill.
Elsewhere, it also noted that the average yield at the open market operations (OMO) segment contracted by 2 basis points to 9.9%. Meanwhile, the Treasury bond secondary market was bearish as the average yield expanded by 2 basis points to 11.5%.
Across the benchmark curve, Cordros Capital’s report indicates that the average yield was flat at the short and long ends but expanded at the mid (+8bps) segment due to the sell-off of the MAR-2027 (+11bps) bond.
In the money market today, the overnight lending rate contracted by 50 basis points to 10.3% in the absence of significant funding pressures on the system.
Following a drawdown in the nation’s external reserves, the naira depreciated by 0.1% to N411.45 a dollar at the Investors and Exporters window but stayed flat at N503.00 in the parallel market.
As of now, Nigeria’s gross external reserves continue to free fall, dropping to $33.14 billion this week from $35.37 billion at the beginning of the year 2021.
T-Bill Records Upward Yield Repricing as Naira Falls
