T-Bills Yield Steadies as Naira Trades at N418.50

The Nigerian Treasury bills (T-Bills) yield closed flattish on Thursday at the time when the naira appreciated by about 0.2% to N418.50 for a United States dollar at the Investors and Exporters foreign exchange window.

Nigerian naira has been moving in both directions, trying to find a support level after it shed value to N419.50. While the spot rate has not broken the peak level seen in the recent time, the market is expecting demand for dollars to further put pressure on Naira as foreign investors stay on the sideway due to weak return in the financial markets.

In the money market, liquidity pressures eased Thursday as short term rates inched lower. The average interbank rate slowdown following moderate pressures during the week. Traders’ notes show that the overnight lending rate contracted by 75 basis points to 11.8%, following inflows from FGN Bond Coupon payments worth N46.92 billion.

Amidst sustained rallies in the equity market, trading activities in the Nigerian Treasury bills secondary market were mixed. The average yield on treasury instruments stayed flat at 3.7% as a result of thin trading. Elsewhere, the average yield in the open market operations (OMO) segment expanded by 17 basis points to 4.2%.

In the bond market, trading activities on the Federal Government of Nigeria (FGN) bonds closed with bullish sentiments, there was a bucket of buying interest that dragged the yield lower. A slew of fixed income traders’ notes shows that the average yield dipped by 7 basis points as result, then closed lower at 11.0%.

Across the benchmark curve, Cordros Capital analysts said in a market note that the average yield contracted at the short (-26bps) end as investors demanded the APR-2023 (+133bps) bond but expanded at the long (+2bps) end following sell-offs of the MAR-2050 (+7bps) bond.  

Amidst relatively quiet trading session in the fixed income market, the average yield was flat at the mid-segment of the curve. #T-Bills Yield Steadies as Naira Trades at N418.50 READ: Treasury Bills Yield Steadies as Naira Slides at Official FX Window