Treasury Bills Yield Steadies, Money Market Rates Decline

Treasury Bills Yield Steadies, Money Market Rates Decline

It was a cold trading session in the Treasury bill market on Thursday as investors continued to weigh the impacts of declining spot rates on the auction rollover on their portfolios. On Wednesday, the Central Bank of Nigeria (CBN) reduced funding costs by cutting back spot rates despite interest and inflation rate jumps.

A robust liquidity level in the financial system supports increased demand for Nigerian treasury bills at the CBN auction, turning the surge into an opportunity to price down rates on rolled over bills. 

Ahead of market debit for auction, liquidity levels closed strong as key money market rates slumped due to the absence of pressures in the financial system. Data from FMDQ Exchange showed that the open repo rate declined by 23 basis points to 2.6%. Also, the overnight lending rate fell by 27 basis points to 3.4%.

Due to thin trading activities in the secondary market, the average yield on Nigerian Treasury bulls was unchanged at 7.3%. In the bond market, trading activities were bearish as the average yield expanded by 2 basis points to 13.5%.

Across the benchmark curve, traders said the average yield expanded at the short (+4bps) and mid (+4bps) segments following profit-taking on the JAN-2026 (+19bps) and APR-2029 (+10bps) bonds, respectively. Conversely, the average yield closed flat at the long end.

“There were profit-taking activities across short and mid-dated securities, particularly the 22 JAN 2026 debt, led to an expansion in the average secondary market yield, reaching 13.06%”

Cowry Asset told investors that the 10-year borrowing cost also experienced an uptick, recording a yield of 13.43% compared to 13.37%. Conversely, the 20-year and 30-year bonds exhibited stability, retaining yields at 14.90% and 15.12%, respectively. 

Elsewhere, FGN Eurobonds faced appreciation across most tracked maturities, reflecting renewed bullish sentiment. Similarly, the average secondary market yield saw a marginal decrease to 10.41%. #Treasury Bills Yield Steadies, Money Market Rates Decline

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