FRI JULY 31 2026-theGBJournal| Nigeria’s money market tightened after this week’s Treasury bills auction absorbed ₦1.25 trillion from the banking system, pushing the overnight lending rate 22 basis points higher to 22.4%, while demand in the secondary fixed-income market kept yields on Treasury bills and Federal Government bonds on a downward trajectory.
The liquidity squeeze triggered by the auction debits tightened interbank funding conditions but did little to dampen investor appetite for government securities, suggesting market participants remain comfortable locking in yields amid expectations that rates may have peaked.
In the Treasury bills secondary market, trading was relatively subdued but retained a bullish bias, with the average yield easing 1 basis point to 18.2%.
Buying interest was concentrated across the curve, led by the 77-day, 161-day and 322-day maturities, driving modest yield declines at the short, mid and long ends.
The Open Market Operations (OMO) segment also strengthened, with the average yield slipping 1 basis point to 21.3%.
Government bonds outperformed, extending this week’s rally as the average secondary market yield declined 8 basis points to 16.9%.
Strong demand for the February 2031, July 2034 and June 2038 benchmark securities compressed yields by as much as 32 basis points, underscoring sustained investor demand despite tighter system liquidity.
The resilience in secondary market demand following this week’s Treasury bills auction indicates that the sizeable liquidity withdrawal has had only a limited impact on market sentiment, with investors continuing to position for capital gains as yields trend lower.
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