The interest rate on Nigerian Treasury bills remains around 19% in the secondary market, as mild buying activity continues ahead of a midweek auction. While the market has been relatively calm, there is still some buying interest, with investors making strategic purchases across short-term, mid-term, and long-term bills.
As a result, the average yield (return on investment) dropped slightly by 0.01% to close at 18.98%. Specifically, mid-term Treasury bills saw a decline of 0.03%, particularly for bills maturing in 164 days. However, short-term and long-term Treasury bill yields remained unchanged.
A similar trend was observed in the Open Market Operations (OMO) segment, where the average yield fell by 0.03% to 22.4%. On Monday, the Nigerian Interbank Treasury Bills True Yield (NITTY) recorded gains across all durations. According to TrustBanc Financial Group, Treasury bills maturing on February 5 saw the biggest drop in yield (-0.04%), while those maturing on December 4 saw the highest increase (+0.36%).
The Central Bank of Nigeria (CBN) is set to conduct a Treasury bill auction on Wednesday to manage liquidity in the financial system. Analysts expect the rates on these bills to drop further.
Throughout February, investor activity in the Treasury bills market was influenced by available cash (liquidity), auction results, and economic data. According to AIICO Capital Limited, trading was slow at the beginning of the month as investors carefully evaluated longer-term bills. However, mid-month demand surged for bills maturing in December and January, following a strong auction performance.
At its last auction, the CBN offered Treasury bills worth ₦670 billion, while ₦955.37 billion worth of bills were maturing. The auction attracted significant interest, with total subscriptions reaching ₦3.218 trillion—showing a strong appetite from investors.
Interest rates for 1-year Treasury bills dropped from 21.80% to 20.32%. AIICO Capital Limited also noted that a sharp decline in inflation (from 34.80% to 24.48%) triggered increased buying activity, leading to lower rates.
As a result, the next Treasury bill auction saw high demand, with interest rates on 91-day, 182-day, and 364-day bills dropping to 17.00%, 18.00%, and 18.43%, respectively.
Strong demand persisted for bills maturing in January and February 2026, although limited supply kept trade volumes low. By the end of the month, continued buying interest and strong auction participation led to a 3.53% decline in the average yield across Treasury bills, closing at 19.78%.
Analysts believe that the market remains stable, with selective trading activities keeping interest rates under pressure.
