FRI JULY 03 2026-theGBJournal| Nigeria’s fixed-income market extended its rally as renewed investor demand for government securities pushed yields lower across the Treasury bill and Federal Government bond markets, while stable liquidity conditions kept short-term funding costs largely anchored.
The overnight lending rate eased by 3 basis points to 22.2%, reflecting the absence of significant liquidity pressures within the banking system.
The marginal decline suggests that financial institutions continued to access funding with relative ease despite the prevailing high-interest-rate environment, underscoring balanced money market conditions.
In the Treasury bill secondary market, sentiment remained firmly bullish as investors increased demand for sovereign short-term instruments, driving the average yield down by 4 basis points to 18.6%.
Buying interest was broad-based across the yield curve. Average yields at the short end declined by 7 basis points, supported by strong demand for the 84-day bill, whose yield fell 13 basis points.
The mid-tenor segment also strengthened, with the average yield declining 3 basis points after investors accumulated the 98-day bill, which compressed by 13 basis points.
At the longer end, sustained demand for the 189-day instrument drove its yield down by 21 basis points, contributing to a 3-basis-point decline in the segment’s average yield.
The sustained appetite for Treasury bills highlights investors’ continued preference for relatively liquid government securities as they position portfolios ahead of future monetary policy and debt issuance developments.
Trading in the Open Market Operations (OMO) segment was comparatively subdued.
The average yield remained unchanged at 21.7%, indicating a balanced market with limited repricing despite ongoing demand across other fixed-income instruments.
The bullish sentiment also extended to the Federal Government bond secondary market, where increased buying interest compressed the average yield by 3 basis points to 17.5%.
Across the benchmark bond curve, yields remained unchanged at the short end, suggesting limited trading activity in near-dated maturities. However, investor demand intensified across medium- and long-dated securities.
The average yield at the mid-segment declined by 5 basis points, driven by strong demand for the April 2032 bond, whose yield dropped 17 basis points.
At the long end, aggressive buying of the June 2053 bond pushed its yield down by 37 basis points, leading to a 5-basis-point decline in the segment’s average yield.
The synchronized decline in Treasury bill and bond yields signals sustained investor confidence in Nigeria’s sovereign debt market, with market participants continuing to lock in attractive yields while taking advantage of opportunities for capital appreciation as demand for government securities remains robust.
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