In Nigeria’s secondary market, the yield gap between government bonds and Treasury bills widened to 200 basis points, as disinflation reduced the real return on investments to 3.27%.
Headline inflation climbed to 24.23% in March, compared to the Central Bank of Nigeria’s benchmark interest rate of 27.50%. Analysts expect the monetary policy rate to hold steady, citing limited room for rate cuts given prevailing economic pressures.
On Monday, trading in the bond market remained subdued, with minimal activity and sparse offers observed in the mid-segment of the yield curve. The tight market conditions reflected low overall volumes and limited seller interest.
Analysts noted that while there were bids for the January 2035 bond, no matching offers were found. Instead, trading was concentrated in the June 2053 and February 2031 maturities.
Across the benchmark curve, yields contracted in the short (-1bp) and mid (-3bps) segments, driven by buying interest in the JUL-2030 (-9bps) and FEB-2031 (-14bps) bonds. The long end of the curve remained unchanged.
The average yield on benchmark Nigerian government bonds fell to 19.03% as investors continued to respond to evolving market conditions ahead of the upcoming monetary policy committee meeting.
Meanwhile, Treasury bill yields declined to 21.03% in the secondary market, as investors moved to position ahead of the next auction.
