Yield Slides on Post Auction Demand for Nigerian Treasury Bills
The average yield on Nigerian Treasury Bills has fallen further due to latest round of sharp buying in the secondary market. Trading activities opened on a bullish note as unmet bids from the Central Bank of Nigeria (CBN) primary market auction on Wednesday filtered into the secondary market.
Investors take their bets to the secondary market after their bids failed at the main auction, driving the yield on naira asset lower on the day. However, activity levels warned midway through the session following the release of a revised auction calendar, which scheduled an NTB auction for Wednesday, March 19, 2025.
This development prompted market participants to exit positions in anticipation of higher yields at the upcoming auction, pushing yields upward. Trading activity was concentrated at the long end of the curve, with the one-year bill reaching 18.50%. On the day, the average benchmark yield declined by 1bp to close at 18.89%.
Also, the average yield declined by a basis point to 22.4% in the OMO bills segment in the secondary market. “… We anticipate that market sentiment will remain cautious in the coming sessions as investors await the upcoming auction”, TrustBanc told investors.
At the midweek auction, the CBN offered ₦550 billion but sold about ₦678.76 billion. The stop rate for the 91-day bill stayed steady at 17.00%. Meanwhile, spot rates for the 182-day and 364-day rose by 4bps (to 17.79%) and 57bps (to 18.39%), respectively.
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