SAT JUNE 27 2026-theGBJournal| Nigeria’s money market conditions tightened during the week as aggressive liquidity withdrawals by the Central Bank of Nigeria (CBN) through Open Market Operations (OMO) and Federal Government bond auctions outweighed sizeable inflows from maturing securities, driving Treasury bill and bond yields sharply higher amid sustained investor repricing.
The overnight (OVN) lending rate edged up by 3 basis points to 22.2% at the close of trading, reflecting the impact of liquidity sterilisation after debits of N4.74 trillion for OMO auctions and N1.22 trillion for Federal Government bond subscriptions exceeded inflows from OMO maturities of N2.93 trillion and FGN bond coupon payments totalling N510.40 billion.
Consequently, average system liquidity moderated to a net long position of N3.57 trillion, down from N4.21 trillion recorded in the previous week.
Activity in the Treasury bills secondary market remained firmly bearish, with investors demanding higher returns as elevated primary market supply prompted a broad repricing of fixed-income instruments. Average yields across Treasury securities rose by 45 basis points week-on-week to 19.6%.
The Nigerian Treasury Bills (NTB) segment led the sell-off, with average yields climbing 52 basis points to 18.7%, while yields in the OMO secondary market increased by 44 basis points to 21.5%, underscoring persistent demand for higher risk-adjusted returns.
The repricing followed two heavily oversubscribed OMO auctions conducted by the CBN during the week.
At Monday’s auction, the apex bank offered N600 billion across available maturities but received subscriptions worth N2.71 trillion.
The CBN ultimately allotted N2.67 trillion, with stop rates settling at 20.40% for the 99-day paper and 20.02% for the 134-day tenor.
Demand remained robust at Tuesday’s OMO auction, where the CBN again offered N600 billion. Total subscriptions reached N2.10 trillion, prompting allotments of N2.06 trillion.
Stop rates closed at 20.75% for the 70-day tenor and 19.99% for the 140-day instrument, highlighting continued investor appetite despite elevated yields.
The bearish sentiment extended to the Federal Government bond secondary market, where average yields advanced by 76 basis points to 17.7% as domestic institutional investors and offshore participants reduced holdings.
Selling pressure was broad-based across the sovereign yield curve. Average yields at the short end rose by 103 basis points, while the mid- and long-dated segments gained 81 basis points and 43 basis points, respectively.
The sharpest declines in bond prices were recorded in the MAR-2027, MAY-2033 and APR-2037 benchmark issues, whose yields jumped by 227 basis points, 132 basis points and 103 basis points, respectively.
The week’s market performance reflects continued tightening in domestic fixed-income conditions as the CBN maintains an aggressive liquidity management stance, while investors continue to reprice sovereign securities in response to abundant primary market issuance and elevated interest rate expectations.
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