WED JULY 08 2026-theGBJournal| Nigeria’s sovereign bond market closed on a subdued note with a mildly bearish bias as investors locked in gains on short-dated securities, pushing benchmark yields slightly higher, while the naira weakened modestly against the U.S. dollar in the official foreign exchange market.
The country’s external reserves extended their steady ascent to a fresh multi-month high, underscoring improving external liquidity, even as robust banking system liquidity kept short-term money market rates broadly stable.
Trading in the Federal Government of Nigeria (FGN) bond secondary market was largely subdued, with limited activity across the curve.
The average benchmark yield rose by one basis point to 17.4%, reflecting cautious investor sentiment amid selective profit-taking.
The upward movement in yields was concentrated at the short end of the curve, where the average yield increased by four basis points.
The rise was primarily driven by heavy profit-taking on the March 2027 bond, whose yield jumped 71 basis points.
In contrast, demand for longer-dated securities continued to provide support, with the average yield at the long end easing by one basis point after buying interest compressed the yield on the April 2037 bond by 10 basis points.
The mid-tenor segment was largely unchanged, indicating a wait-and-see approach among investors.
In the foreign exchange market, the naira depreciated by 0.2% at the official window, closing at N1,381.00 per U.S. dollar, extending recent fluctuations in the exchange rate despite continued improvements in the country’s external buffers.
Nigeria’s gross external reserves continued their upward trajectory, rising by 0.1% to $51.57 billion as of July 6, 2026.
The sustained reserve accumulation reinforces the country’s external liquidity position and provides additional support for exchange-rate stability amid ongoing foreign exchange market reforms.
Money market conditions remained comfortable as liquidity in the banking system strengthened further, ending the session with a N4.90 trillion net positive balance.
The improved liquidity environment exerted mild downward pressure on funding costs, with the overnight lending rate easing marginally by two basis points to 22.13%.
The Nigerian Interbank Offered Rate (NOFR) and the Open Repo (OPR) rate were unchanged at 22.00%, reflecting ample cash availability across the financial system.
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