Nigerian T-Bills Yield Climbs to 4.4%
The average yield on Nigerian Treasury bills climbed by 77 basis points on Tuesday amidst selloffs in the secondary market. Recall that spot rates on 91-day treasury bills were priced down at the Central Bank of Nigeria’s primary market auction conducted last week.
On the other hand, spot rates on 182-day and 364-day bills were adjusted upward ahead of Nigeria’s inflation data release. This week, the National Bureau of Statistics (NBS) is expected to release the consumer price index (CPI) figures for the month of February.
Analysts are projecting a higher inflation print after the CBN naira redesign policy implementation spooked the financial markets. Headline inflation reversed the downward trend in January to 21.82% amidst distortions in the economy – fuel and naira scarcity stoked pressures on consumers’ goods.
With pressures on the financial system liquidity level on Tuesday, the Nigerian Treasury bills closed on a bearish note as investors seek cash. Then, the average yield expanded by 77 basis points to 4.4% – falling from 11% last year December.
Across the curve, Cordros Capital analysts told clients via email that the average yield on Treasury bills was flat at the short and mid segments but expanded at the long (up by 121bps) end.
The surge was driven by a sell-off of the 345-day to maturity, pushing the yield on the longer tenor instruments upward by 10.92ppts. Elsewhere, the average yield was flat at 3.0% in the OMO bills segment.
In the money market, short-term benchmark rates increased over funding pressures in the financial system.
The open repo rate (OPR), and the overnight lending rate (OVN), climbed 13 basis points to 10.63% and 20 basis points to 11.01% at the close of the trading session. #Nigerian T-Bills Yield Climbs to 4.4%
