WED JULY 22 2026-theGBJournal| Nigeria’s fixed-income market rallied on Tuesday, with Treasury bill and Federal Government bond yields easing across the curve as investors returned to the secondary market following recent debt auctions by the Debt Management Office (DMO) and the Central Bank of Nigeria (CBN).
This is even as money market rates remained elevated despite a wave of liquidity from government coupon payments.
The overnight lending rate edged up by four basis points to 22.2 per cent, underscoring persistent liquidity tightness in the banking system despite the injection of about N1.46 trillion through Federal Government bond coupon payments.
The modest increase suggests that liquidity conditions remain constrained, with demand for short-term funds continuing to outweigh the impact of the coupon inflows.
In the Treasury bills market, investors sustained their appetite for sovereign securities, pushing the average secondary market yield down by two basis points to 18.4 per cent.
The rally follows recent CBN Treasury bill and Open Market Operations (OMO) auctions, where robust investor demand reinforced expectations that yields may have peaked in the near term.
Buying interest was concentrated at the short and long ends of the curve.
Average yields declined by five basis points at the short end, driven largely by demand for the 44-day bill, whose yield fell 33 basis points.
At the long end, yields eased by one basis point following strong demand for the 198-day instrument, which compressed by 11 basis points. Yields in the mid-tenor segment were broadly unchanged.
The OMO market also recorded modest gains, with the average yield declining by one basis point to 21.4 per cent, reflecting sustained institutional demand for higher-yielding central bank instruments.
The rally was more pronounced in the Federal Government bond market, where investors stepped up purchases after the DMO’s latest bond auction, driving the average secondary market yield down by nine basis points to 17.3 per cent.
Demand was broad-based across the yield curve.
Average yields declined by eight basis points at the short end, 16 basis points in the mid-tenor segment and five basis points at the long end.
The strongest buying interest was seen in the February 2031, March 2036 and April 2037 benchmark bonds, whose yields fell by 20 basis points, 41 basis points and 22 basis points respectively.
The decline in secondary market yields points to renewed investor confidence in Nigeria’s sovereign debt market following recent CBN liquidity operations and the DMO’s bond issuance, with fund managers continuing to lock in attractive real returns amid expectations that the Central Bank will maintain a tight monetary policy stance even after holding its benchmark interest rate at 26.5 per cent this week.
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