Yield on Nigerian Treasury Bills Down Slightly to 25%
Ahead of Central Bank of Nigeria (CBN) midweek primary market auction, the average yield in Nigerian Treasury bills went down slightly to 25% in the secondary market.
The contraction in Treasury bills benchmark yield follow some buying interest experienced in the fixed income space, reversing previous selloffs that stoke a strong increase in the yield curve last week.
The market saw renewed buying interest ahead of primary market auction amidst liquidity pressures in the financial system. Despite the fact that deposit money banks raised N1 trillion from the CBN standing lending facility window, there was significant treasury bills selloffs last week. Yield increased by more than 6% week on week to stay above 25% versus annual inflation rate of 33.20%.
In the fixed income market yesterday, with tight liquidity, investors ramped up Treasury bills across the short, belly and the long end of the curve as risk off sentiment eased moderately.
As a result, the average yield declined by 3bps to 25.2%. Across the curve, the average yield contracted at the short (-5bps), mid (-5bps) and long (-1bp) segments.
The yields contraction across the lines were triggered by fixed income securities investors demand for 31-day to maturity bill, causing its associated yield to slump by -6bps.
The market also saw demand for 157-day to maturity, causing its yield to fall by -5bps and increase interest in 325-day to maturity dragged its yield lower by -5bps) bills. Similarly, the average yield dipped by 3bps to 18.4% in the OMO segment.
In the money market, key money market rates such as the open repo rate (OPR) and overnight lending rate (OVN) increased by 0.50% and 0.71%, to close at 29.89% and 30.96%, respectively
