…The overnight (OVN) rate moderated by 5bps w/w to 27.0% supported by improved system liquidity from OMO maturities (N758.00 billion) and FAAC disbursements
SAT AUG 30 2025-theGBJournal| Nigerian treasury yields were higher on Friday as investors positioned ahead of the August bond auction, with the FGN Bond average yield rising by 40bps w/w to 17.1%.
Across the benchmark curve, the bond average yield increased at the short (+38bps), mid (+63bps), and long (+9bps) segments, driven by selloffs of the FEB-2028 (+114bps), JUL-2034 (+165bps), and MAR-2036 (+107bps) bonds, respectively.
The Debt Management Office (DMO) conducted an FGN bond PMA on Monday (August 25), reopening the JUN-2032 bond and introducing a new AUG-2030 bond with a total offer size amounting to N200.00 billion.
Despite robust subscription (N268.17 billion; bid-to-offer: 1.3x), the DMO underallotted N136.16 billion (bid-to-cover: 2.0x), setting stop rates at 17.95% and 18.00%, respectively, consistent with its tight pricing stance.
Meanwhile, proceedings in the Treasury bills secondary market were bearish as market participants repriced yields higher in anticipation of higher rates at next week’s PMA. Consequently, the average yield expanded by 23bps w/w to 22.2%.
Across the market segments, the average yield increased by 50bps to 18.9% in the NTB segment, while it dipped slightly by 3bps to 25.5% in the OMO segment.
To sterilise excess liquidity, the CBN floated N700.00 billion across the 83D (NGN300.00 billion) and 84D (N400.00 billion) maturities.
Demand was robust (total subscription: N1.57 trillion; bid-to-offer: 2.2x), with N1.19 trillion allotted at elevated stop rates of 26.49% (83D) and 26.50% (84D).
The fixed income market capitalization closed out the week at N88.77 trillion
The overnight (OVN) rate moderated by 5bps w/w to 27.0% supported by improved system liquidity from OMO maturities (N758.00 billion) and FAAC disbursements.
However, the Central Bank of Nigeria (CBN) sterilized a significant portion of these inflows through two OMO auctions, absorbing N1.19 trillion.
Despite the aggressive mop-up, liquidity levels remained robust, with the market closing the week at a net long position of N1.52 trillion (vs. N159.40 billion in the prior week).
The surge was further reinforced by heightened placements at the CBN’s Standing Deposit Facility (SDF), where the weekly average climbed to N1.20 trillion, nearly three times the previous week’s N419.77 billion.
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