Treasury Bills Yield Plunged to 22% over Buying Interest
The average yield on Nigerian Treasury bills plunged to 22% following buying interest witnessed across the short, belly and long end of the curve in the secondary market.
The surge in demand followed increase liquidity level in the financial system. The pressures on liquidity level eased as market recorded N53.35 billion inflows from FGN bonds coupon payment.
The amount lifted total liquidity level higher, causing market players to sought investment options to park their free cash. Data from FMDQ Securities Exchange showed that consequent to the inflow, short term benchmark interest rates slide.
According to information obtained from FMDQ, the overnight lending rate contracted by 58 basis points to 30.7%, following the inflows from FGN bond coupon payments worth N53.35 billion.
Though, funding rates remained elevated at double digit highs since 6% upward adjustments in monetary policy rate in 2024. Deposit money banks in the country has been raising funds from the Central Bank of Nigeria (CBN) standing lending facility at a steep rate.
In the secondary market, trading activities ended bullish at the beginning of the week following solid subscription level at the CBN auction last week.
The missed bid found ways to the secondary market, supporting the bullish drive which caused the average yield declined by 12 basis points to 22.2%, according to fixed interest securities traders note.
In its market update, Cordros Capital Limited reported that across the curve, the average yield dipped at the short (-34bps), mid (-3bps) and long (-4bps) segments. The yields contraction at the short, belly and long end of the curve was due to buying interest in the 24-day to maturity (-179bps), 178-day to maturity (-4bps) and 332-day to maturity (-6bps) bills, respectively.
Similarly, the average yield contracted by 3bps to 18.8% in the OMO bills segment in the secondary market. # Nigeria T-Bills Yield Plunged to 22% over Buying Interest MTN Nigeria Posts N576bn Loss, Customer Declines in Q1
