SAT AUG 16 2025-theGBJournal| The Treasury bills secondary market traded in a lull with a bearish undertone by close of Friday’s trading session, as the average yield across all instruments expanded by 1bp w/w to 21.4%.
Across the market segments, the weekly average yield expanded by 4bps to 18.0% in the NTB segment while it declined by 2bps to 24.6% in the OMO segment.
With system liquidity expected to improve, demand for Treasury bills is likely to resurface, exerting downward pressure on yields.
At next Wednesday’s (20 August) NTB primary market auction, where the Debt Management Office (DMO) will roll over N230 billion in maturities, we anticipate a moderate tapering of stop rates.
Meanwhile, the overnight (OVN) rate rose sharply by 550bps w/w to 32.4%, reflecting liquidity pressures from CBN FX sales (N153.00 billion), alongside increased uptakes at Central Bank of Nigeria (CBN) Standing Lending Facility (SLF) window (weekly average: N294.80 billion vs N34.13 billion in the prior week).
Consequently, average system liquidity deteriorated, closing the week at a net long position of N62.94 billion (compared to a net long position of N566.91 billion in the previous week).
Next week, barring any mop-up activity by the CBN, we expect significant inflows from OMO maturities (N854.46 billion) to bolster system liquidity, thus exerting pressure on the OVN rate.
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