The average yield on Nigerian Treasury bills traded in the secondary market rose by 10 basis points following sell pressure on naira assets. This is as treasury bills debt rises to record high of N10.4 trillion.
Demand for Treasury bills is trending as investors continue to search for inflation protected investment options.
Traders said in their separate market updates that the trading activities in treasury bills market was quiet as many participants focused on the Central Bank of Nigeria (CBN) primary market auction.
By the closing bell, according to AIICO Capital Limited, the market was bearish, as yields rose in expectation of higher stop rates at the primary market auction.
Overall, the average mid-rate increased 10 bps to 20.16%.
Explaining further, Cordros Capital Limited told investors that across the curve, the average yield declined at the short (-1bp), mid (-1bp), and long (-2bps) segments.
The yield contraction was attributed to investors and other market participants’ demand for 92-day to maturity bills whose yield dipped by a basis points.
There was also buying momentum at the belly of the curve as traders said investors increased appetite on 169-day to maturity bills, causing its yield to drop by 1bp while demand for 330-day to maturity dragged yield lower by -2bps bills.
Similarly, the average yield dipped by 3bps to 23.5% in the OMO bills segment in the secondary market, according to traders market updates. In the money market, short term benchmark interest rates rose as debit for FGN bonds auction drained liquidity level in the financial system.
Consequently, the overnight lending rate expanded by 10bps to 24.1% after outflow of N297.01 billion for June 2024 FGN bond primary market auction left the system.
Nigeria’s total Treasury Bills debt hits a record high of N10.4 trillion, representing a 60 per cent rise in just three months, data from the Debt Management Office (DMO) has revealed.
