THUR AUG 06 2026-theGBJournal| Nigeria’s fixed-income market extended its rally on Wednesday as sustained system liquidity kept funding costs broadly stable and encouraged investors to increase positions in Treasury bills and Federal Government bonds (FGN Bonds), reinforcing the bullish sentiment that began to emerge after Tuesday’s largely subdued trading session.
The overnight lending rate edged lower by 3 basis points to 22.1 percent, reflecting the absence of significant funding pressure in the banking system.
The marginal decline suggests that liquidity conditions remained comfortable, allowing financial institutions to meet short-term funding needs without pushing interbank borrowing costs higher.
The Treasury bills secondary market strengthened, with the average yield declining by 4 basis points to 18.1 percent as investors continued to seek attractive real returns in the short-term debt market.
Buying interest was evident across the yield curve, with average yields falling by 1 basis point at the short end, 7 basis points in the mid-tenor segment and 4 basis points at the long end.
Demand was particularly strong for the 92-day, 106-day and 211-day maturities, where yields compressed by 1 basis point, 20 basis points and 25 basis points, respectively.
The rally contrasted with Tuesday’s quieter session, when yields were largely unchanged as investors adopted a wait-and-see approach following recent liquidity inflows.
In contrast, the Open Market Operations (OMO) segment witnessed mild profit-taking, with the average yield rising by 3 basis points to 21.4 percent, suggesting some investors rotated into higher-yielding securities or adjusted portfolios after recent gains.
The Federal Government bond market also closed on a firmer footing, extending Tuesday’s positive tone as investors increased demand for duration.
The average benchmark yield declined by 3 basis points to 16.6 percent, supported by broad-based buying across the curve.
Yields fell by 3 basis points at the short end, 7 basis points in the mid-tenor segment and 2 basis points at the long end, driven by demand for the April 2029, March 2036 and June 2038 bonds, whose yields declined by 6 basis points, 18 basis points and 8 basis points, respectively.
The sustained decline in yields across both Treasury bills and bonds points to persistent investor confidence in Nigeria’s sovereign debt market, underpinned by ample liquidity, expectations of stable monetary conditions and continued appetite for fixed-income assets despite elevated nominal yields.
With funding pressures remaining muted, analysts expect demand for sovereign securities to remain resilient in the near term, although attention will increasingly shift to upcoming primary market auctions and liquidity flows for fresh direction.
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