MON NOV 10 2026-theGBJournal| Nigeria’s fixed-income market sustained its bullish momentum, with Treasury bill and Federal Government of Nigeria (FGN) bond yields declining across key segments of the yield curve, as investors increased demand for selected instruments.
The rally came despite tightening liquidity conditions in the banking system, which pushed the overnight lending rate higher.
The overnight lending rate rose by 2 basis points (bps) to 20.2%, reflecting the absence of significant liquidity inflows into the financial system. The increase signals tighter short-term funding conditions among banks, even as demand for government securities supported a decline in secondary-market yields.
In the Treasury bill secondary market, average yields contracted by 4bps to 17.9%, extending the positive sentiment across the curve.
Yields declined at the short, mid and long segments by 3bps, 3bps and 6bps, respectively, driven by renewed buying interest in the 80-day (-4bps), 164-day (-4bps) and 262-day (-37bps) maturities.
The sharpest decline occurred at the longer end, where the 262-day instrument recorded a 37bps contraction, highlighting stronger demand for longer-dated Treasury bills.
However, sentiment was less favourable in the Open Market Operations (OMO) bill segment, where the average yield expanded by 4bps to 18.6%, indicating divergent trading dynamics across the fixed-income market.
Similarly, the FGN bond secondary market recorded broad-based buying interest, with the average yield declining by 8bps to 16.1%. Across the benchmark yield curve, yields contracted at the short and mid segments by 20bps and 2bps, respectively, while the long end remained unchanged.
The rally was largely driven by demand for the March 2027 and May 2033 instruments, whose yields declined by 85bps and 25bps, respectively.
The pronounced decline in the March 2027 bond yield suggests particularly strong buying interest in the shorter-dated segment, while demand for the May 2033 instrument supported gains further along the curve.
Overall, the decline in Treasury bill and FGN bond yields points to sustained investor appetite for government securities, notwithstanding tighter money-market liquidity.
However, the increase in OMO yields and overnight funding costs underscores the uneven nature of liquidity and yield movements across market segments
X-@theGBJournal|email:gbj@govbusinessjournal.com|govandbusinessj@gmail.com
