The average yield on Nigerian Treasury bills increased by seven basis points to 25.60 due to sell pressure seen in the secondary market, dealers reported in an email.
Due to economic uncertainty, both domestic and foreign investors have begun liquidating their holdings in anticipation of the July inflation estimate. Analysts have projected that base effects will cause the consumer price index to decline in July, following the longest period of time ever seen.
The decision to anchor Nigeria’s concerning consumer price index, which reached a 30-year high, broke household aggregate spending and hurt corporate performance, causing interest rates to rise to 26.75%.
On Monday, the Treasury bills market was mixed-to-bearish, with selling interest predominantly seen across mid- to long-dated papers. At the end of trading, the average mid-rate across the benchmark Nigerian Treasury bills increased due to selling pressures.
The average yield declined in the short (-4 bps) and mid (-5 bps) segments, driven by buying interests in the 80-day to maturity bills, whose yield slumped by -4 bps. The market saw buying interest also in 171 days to maturity in the secondary market, causing its yield to decline by -5 bps.
Conversely, the average yield expanded at the long (+19 bps) end due to profit-taking activities in the 325 days to maturity, causing its yield to rise by +173 bps.
Similarly, crunching selloffs were witnessed in the OMO bills market after two failed primary market auctions, suggesting foreign investors’ apathy to the borrowing instrument spurred by weak sentiment.
The average yield increased by 49 basis points on Monday to 25.8% in the OMO Bills segment in the fixed income securities markets.
