TUE AUG 25 2026-theGBJournal| Nigeria’s money-market conditions remained broadly stable at the start of the week, but selling pressure in short-dated Treasury bills pushed yields higher as investors demanded greater returns on near-term government paper.
The overnight lending rate held at 22.1%, signalling that banks faced no significant funding stress despite movements across the secondary fixed-income market.
The more notable shift came in Treasury bills, where the average secondary-market yield rose 32 basis points to 18.9%.
The move was concentrated at the short and middle sections of the curve, suggesting investors were reducing exposure to some near-term maturities or demanding higher yields before taking on additional duration.
Short-end yields rose 72bps on average, led by a 125bps jump in the 87-day-to-maturity bill. Mid-curve yields increased 41bps, driven by a 117bps rise in the 136-day bill.
By contrast, the long end proved more resilient. Average yields fell 5bps, supported by demand for the 192-day bill, whose yield declined 21bps.
OMO demand remains supportive, moving in the opposite direction. Average OMO yield declined 6bps to 20.7%, indicating firmer demand for central-bank instruments even as conventional Treasury bills came under pressure.
The contrasting moves suggest that investors are differentiating between the two pools of short-term government paper rather than exiting fixed income altogether.
Meanwhile, FGN bonds remain stable. The market was largely unchanged, with the average yield holding at 16.6%. The stability suggests that the pressure seen in Treasury bills has yet to translate into a broader repricing of sovereign debt.
Similarly, Nigeria’s Eurobonds track mixed global signals. Nigeria’s dollar-denominated Eurobonds also showed mixed investor sentiment, with average yields holding at 6.94%.
The muted move reflected conflicting signals from the US Treasury market. US government bond yields initially approached a roughly 20-month high before falling as investors assessed the implications of Treasury plans for increased bond buybacks.
Recent trading has highlighted the tension between elevated term premiums, inflation concerns and the Treasury’s efforts to support the market through buybacks.
Overall, Monday’s trading points to a market that remains liquid but increasingly selective.
The sharp rise in short- and mid-tenor T-bill yields suggests investors are seeking better entry levels, while demand for longer-dated bills, OMO securities and stability in FGN bonds indicate that the adjustment remains concentrated rather than systemic.
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