…Selling pressure was broad-based across the benchmark yield curve.
SUN OCT 11 2026-theGBJournal| Heavy Central Bank of Nigeria (CBN) liquidity absorption and local profit-taking drive a broad fixed-income sell-off last week, pushing Treasury bill yields to 18.2% and FGN bond yields to 16.1%, despite pockets of demand.
Nigeria’s fixed-income market came under renewed pressure in the week ended Friday, as aggressive liquidity absorption by the Central Bank of Nigeria (CBN), cautious positioning ahead of Treasury bill auctions and profit-taking by local investors drove yields higher across key segments of the debt market.
Average Treasury bill yields rose 20 basis points week-on-week to 18.2%, while average Federal Government of Nigeria (FGN) bond yields climbed 25bps to 16.1%, reflecting sustained selling pressure despite offshore demand.
The pressure was evident in the money market, where the overnight (OVN) rate rose 5bps week-on-week to 20.9%.
Outflows from Open Market Operations (OMO) bills amounting to ₦3.31 trillion and net Nigerian Treasury bills (NTB) debits of ₦262.75 billion outweighed ₦2.17 trillion in OMO maturities.
Consequently, average system liquidity moderated to a net long position of ₦4.01 trillion from ₦5.04 trillion in the previous week.
Treasury Bills: Yields Rise Ahead of Auction
The Treasury bills secondary market traded on a bearish note, with average yields rising 20bps to 18.2%.
However, performance diverged across segments, as NTB yields climbed while OMO yields declined on demand spillovers from the primary market.
Average NTB secondary market yields expanded 8bps to 17.9%, reflecting mild selling pressure across the curve as investors adopted a cautious stance ahead of the week’s auction.
At Wednesday’s NTB Primary Market Auction (PMA), the Debt Management Office (DMO) offered ₦900 billion across the three tenors, attracting ₦1.77 trillion in bids.
The DMO ultimately allotted ₦968.47 billion, exceeding its initial offer as demand remained robust.
Stop rates on the 364-day bill declined 4bps to 15.85%, while rates on the 91-day and 182-day instruments held steady at 15.50% and 15.80%, respectively.
In contrast, average OMO secondary market yields contracted 17bps to 18.7%, as unmet demand at Tuesday’s, 6 October, OMO auction spilled into the secondary market.
The CBN offered ₦2 trillion in OMO bills but attracted ₦3.53 trillion in bids, ultimately allotting ₦3.31 trillion.
Stop rates settled at 17.22% for the 147-day tenor and 16.92% for the 182-day instrument, underscoring strong investor appetite for the central bank’s short-term securities.
FGN Bonds: Local Profit-Taking Deepens Sell-Off
The bearish sentiment extended to the FGN bond market, where average yields widened 25bps week-on-week to 16.1%, as local investors locked in profits despite offshore demand.
Selling pressure was broad-based across the benchmark yield curve.
Average yields rose 31bps at the short end, 29bps in the mid-tenor segment and 14bps at the long end, reflecting significant repricing of selected benchmark bonds.
The March 2027 bond recorded the steepest yield increase among the highlighted securities, surging 138bps.
The March 2036 and April 2037 bonds also came under pressure, with yields rising 48bps and 50bps, respectively.
The week’s performance highlights the contrasting forces shaping Nigeria’s fixed-income market: strong demand at primary auctions and selective buying in OMO securities on one hand, and liquidity absorption, cautious positioning and profit-taking weighing on secondary-market valuations on the other.
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