FRI SEPT 05 2025-theGBJournal| Nigeria’s Treasury bills market were broadly bullish this week, driven by the strong system liquidity.
The average yield across all instruments fell by 13bps w/w to 22.1% by close of trading on Thursday, a holiday shortened trading week.
Precisely, NTB yields contracted by 31bps to 18.6%, offsetting a 4bps increase in OMO yields to 25.5%.
At the mid-week NTB auction, the Central Bank of Nigeria (CBN) offered N480.00 billion across the 91D, 182D, and 364D maturities, attracting strong subscription of N1.01 trillion (bid-to-offer: 2.1x vs. 1.7x prior).
Eventually, the CBN over-allotted N585.25 billion at stop rates of 15.32% (-18bps), 15.50% (unchanged), and 17.69% (+25bps) for the 91D, 182D, and 364D bills, respectively.
Cordros Research analysts believe this signals front-end easing and a measured adjustment at the long end, where the pace of increases has slowed relative to prior auction (+94bps).
Meanwhile, at Tuesday’s OMO auction, the apex bank offered N600.00 billion for the 84D paper, which was oversubscribed at N1.18 trillion (2.0x bid-to-offer).
Ultimately, N620.65 billion was allotted at a stop rate of 26.40%, underscoring the CBN continued liquidity sterilization drive at elevated yields.
”Looking ahead, we expect NTB yields to remain anchored in the near term, supported by sustained system liquidity and strong investor demand,” says Cordros.
While robust subscription levels point to healthy appetite for sovereign paper, the interplay between liquidity sterilization and investor demand will keep yield movements relatively volatile across maturities.
Meanwhile, the FGN bond secondary market was also bullish this week, driven by robust interbank liquidity.
The average yield for bonds dipped by 13bps to 17.0%.
Across the benchmark curve, the average yield decreased at the short (-5bps), mid (-41bps), and long (-3bps) segments, driven by heightened demand for the JUL-2030 (-32bps), FEB-2030 (-47bps), and MAR-2036 (-21bps) bonds, respectively.
The overnight (OVN) rate remained unchanged at 27.0% supported by the strong system liquidity at the start of the week, boosted by N460.00 billion in OMO maturities.
However, the CBN countered with an OMO auction that absorbed N620.65 billion, moderating liquidity conditions.
As a result, the system’s net long position eased slightly to N1.06 trillion (vs. N1.17 trillion in the prior week).
Overall, the fixed income market capitalization fell 0.29% to N51.05 trillion.
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