SAT OCT 24 2026-theGBJournal| The overnight (OVN) rate declined by 2bps w/w to 20.3%, despite mixed liquidity flows, as the average system liquidity surplus increased to NGN6.66 trillion from NGN5.83 trillion in the previous week.
In the fixed-income market, Treasury bills yields declined by 4bps to 18.2%, supported by strong demand in the OMO segment, while FGN bond yields rose marginally by 1bp to 16.4% amid cautious investor sentiment ahead of the bond auction.
At the auction, the Debt Management Office (DMO) allotted NGN1.21 trillion from total demand of NGN1.75 trillion, with stop rates on the SEP-2036 and JUN-2038 bonds rising by 50bps and 34bps to 17.29% and 17.19%, respectively.
Money Market
The OVN rate edged down by 2bps w/w to 20.3%, reflecting mixed liquidity flows during the week. Inflows from OMO maturities of NGN2.07 trillion and NTB maturities of NGN698.05 billion were outweighed by outflows from OMO issuances of NGN2.63 trillion and FGN bond debits of NGN2.02 trillion.
Despite these net outflows, average system liquidity strengthened to a net long position of NGN6.66 trillion from NGN5.83 trillion in the previous week, largely driven by sustained elevated balances at the Central Bank of Nigeria’s (CBN) Standing Deposit Facility (SDF) window.
Treasury Bills Market
The Treasury bills secondary market traded on a bullish note, with the average yield across all instruments declining by 4bps w/w to 18.2%. However, performance varied across segments.
Average NTB secondary market yields rose by 5bps to 17.9%, reflecting selective selling activities across the curve.
In contrast, average OMO secondary market yields contracted by 21bps to 18.5%, supported by strong reinvestment demand amid robust system liquidity.
At the OMO Primary Market Auction (PMA), the Central Bank of Nigeria (CBN) offered NGN2.00 trillion in bills, attracting total subscriptions of NGN2.73 trillion.
The CBN subsequently allotted NGN2.63 trillion, reflecting strong investor demand. Stop rates settled at 17.63% and 17.14% for the 138-day and 180-day tenors, respectively.
FGN Bond Market
The FGN bond secondary market traded on a bearish note, as the average yield across instruments increased by 1bp w/w to 16.4%. The marginal increase reflected cautious investor positioning ahead of the week’s bond auction.
Across the benchmark yield curve, average yields expanded at the short and long ends by 13bps and 6bps, respectively, driven by selloffs in the MAR-2028 and JUL-2042 bonds, whose yields rose by 42bps and 65bps, respectively.
Conversely, yields at the mid-segment contracted by 5bps, supported by demand for the MAY-2029 bond, whose yield declined by 18bps.
At the primary market auction on Monday, the Debt Management Office (DMO) reopened the FEB-2034, SEP-2036 and JUN-2038 bonds, offering a total of NGN1.75 trillion.
Total subscriptions amounted to NGN1.75 trillion, while the DMO allotted NGN1.21 trillion through competitive bids.
The auction results reflected upward pressure on borrowing costs across the longer-dated instruments.
Stop rates for the SEP-2036 and JUN-2038 bonds, which were the on-the-run benchmarks at the previous auction, increased by 50bps and 34bps to 17.29% and 17.19%, respectively.
Meanwhile, the FEB-2034 bond recorded a stop rate of 16.99%.
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