Yield Falls to 3.27% as Demand for Treasury Bills Rises
Nigerian Treasury bills

Yield Falls to 3.27% as Demand for Treasury Bills Rises

The average yield on Nigerian Treasury bills falls again as local investors continue to channel available funds into the secondary market. Thus, due to selling pressure on mid- and long-dated securities, the Nigerian Treasury bills market saw an average yield down 3 basis points to 3.27%.

The market has been seeing two ways demand from both secondary and primary markets, causing spot rates to decline consistently. Across the curve, traders said the average yield closed flat at the short and mid segments but dipped at the long (-14bps) end following demand for the 283-day to maturity (-45bps) bill.

The bullish trend which started late in 2022 has dragged the average yield to a single-digit low after printing at 11%.  Speaking about the trend, analysts explained that buying momentum seeing in the treasury bills market was driven by strong liquidity in the financial system. >>>Ghana Slams MTN $773m Tax Bill After Audit

Slowed down by 13 basis points to 21.34% in December, investment return remained exposed to Nigeria’s inflation rate.  In the money market, short-term rates were steady on Monday with the system liquidity closing at a net long position of N244.51 billion, according to Cordros Capital analysts.

Despite its higher position, analysts said the Nigerian interbank offered rate, NIBOR, climbed across the board for most maturities. Market analysts at Cowry Asset Management said in a note that other measures of money market stress were tightened, as banks with liquidity sought higher rates.

However, short-term benchmark rates: the open repo rate (OPR) and the overnight lending rate (OVN), remained stable at 9.67% and 10.00%, respectively, according to data from FMDQ Exchange. 

Elsewhere, the average yield was flat at 3.4% in the open market operations (OMO bills) segment as the apex bank failed to refinance matured bills. # Yield Falls as Investors Pump Funds into T-Bills

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