T-Bills Yield Steadies as Pressure on Naira Slowdown
The average yield on Nigerian Treasury Bills steadies on Thursday after a 16 basis points expansion recorded Wednesday as pressure ease on Nigerian local currency, naira, at Investors and Exporters foreign exchange window.
Data from FMDQ Exchange platform shows that naira appreciated against the United States dollar at investors’ window by 0.27% to N410.88 depreciated by 0.2% to N522.00 at the parallel market amidst warning on FX policy breaches.
The Central Bank had through the local banks read the riot act to customers, warning against sharp practice when requesting to purchase foreign currencies for personal and business travel allowance.
In the money market space, liquidity dragged rated downward as data from FMDQ shows that the overnight lending rate contracted by 333 basis points to 10.0%.
Meanwhile, open buy back sloped downward 300 basis points to 10%. This happened despite funding pressures from net Treasure issuances worth N150.13 billion.
Today, the Nigerian Treasury Bill secondary market closed flattish as the average yield remains unchanged at 5.0%. Elsewhere, the average yield at the open market operations (OMO) segment expanded by 5 basis points to 6.0%, according to Cordros Capital. .
Also, trading in the Federal Government bond secondary market was bearish, as the average yield expanded by 6 basis points to 11.1%.
Across the benchmark curve, analysts hinted that average yield expanded at the short (+4bps), mid (+5bps) and long (+7bps) segments as investors sold off the JAN-2026 (+19bps), FEB-2028 (+9bps) and MAR-2035 (+20bps) bonds, respectively.
The outlook on fixed income market yield repricing remains tepid following an accommodative policy stance of the Central Bank of Nigeria and deliberate efforts to keep interest cost burden low on rising total public debt by the Debt Management Office.
In the secondary Treasury bills (T-bills) market, the average yield on the 1-year T-bills rose 912 basis points between January and June 2021 to 9.2%, according to Afrinvest while the yield on the 10 and 30-year sovereign bonds increased by 544 and 568 basis points respectively to 12.7% and 13.1%.
Largely, the renewed slowdown in average yields has tempered investors interest in the foxed income market in the second half of the financial year 2021. While investors await catalysts to drive yields upward, analysts see the possibility the market will remain cold till the fourth quarter.
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T-Bills Yield Steadies as Pressure on Naira Slowdown
