SAT JULY 05 2025-theGBJournal| Treasury bills average yield across all instruments fell 45bps to 22.9% on Friday, supported by sustained demand at both ends of the curve.
Across the market segments, the average yield declined by 30bps and 71bps to 19.9% and 25.7% in the NTB and OMO segments, respectively.
The Central Bank of Nigeria (CBN) conducted an Open Market Operations (OMO) auction on Monday (June 30), offering instruments worth N600.00 billion – N300.00 billion for the 113D and N300.00 billion for the 260D.
Total subscription levels settled at N771.65 billion (bid-to-offer ratio: 1.3x), with the CBN allotting N745.40 billion for the 260D bill only, at a stop rate of 23.99%.
We expect the improved liquidity position to drive demand for bills, causing yields in the Treasury bills secondary market to decline.
At the Bonds market, the FGN bond secondary market finished the week bullish, driven primarily by demand from portfolio managers.
Consequently, the average yield declined by 84bps to 17.5%. Across the benchmark curve, the average yield decreased at the short (-64bps), mid (-81bps), and long (-110bps) ends, driven by demand for the FEB-2028 (-107bps), MAR-2035 (-114bps), and JUL-2045 (-190bps) bonds, respectively.
The uniform decline in yields highlights strong investor appetite across the curve,
particularly at the short and long ends.
In the Eurobond space, yield declined by 36bps to 8.61% reflecting buying interest across the curve.
Meanwhile, the overnight (OVN) rate expanded by 42bps w/w to 27.4% driven by debits for the OMO PMA (N745.50 billion).
The strong system liquidity at the start of the week, however, resulted in the average system liquidity settling at a net long position of N713.92 billion (compared to a net long position of N468.76 billion in the previous week).
Barring any mop-up activities by the CBN, we expect system liquidity to remain sturdy, causing the OVN rate to remain at current levels.
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