Yields on Nigerian Treasury Bills and Open Market Operation (OMO) instruments fell in the secondary market as investor sentiment turned bullish ahead of the Central Bank and Debt Management Office’s (DMO) anticipated Q3 2025 domestic borrowing calendar.
A consistent buying trend in fixed-income securities—spurred by a gradual easing in headline inflation—continued to suppress returns across tenors. With the benchmark interest rate at 27.50% and headline inflation recorded at 22.79%, a notable positive real return has attracted investor attention to short- and mid-term debt instruments.
The CBN floated ₦600 billion in OMO bills targeting 113-day and 260-day maturities, receiving a robust subscription of ₦771.65 billion. However, only the 260-day papers were allotted—totaling ₦745.40 billion—at a marginal clearing rate of 23.99%. The 113-day offering was left untouched.
This auction outcome, coupled with subdued primary market activity, set the stage for continued contraction in yields. According to analysts at Cordros Capital, average Nigerian Treasury Bills yields declined by 3 basis points to 20.2%, with contractions recorded across short (-2 bps), mid (-4 bps), and long (-2 bps) segments.
Key bills leading this decline included the 80-day (-3 bps), 143-day (-10 bps), and 339-day (-22 bps) maturities. In parallel, the OMO segment also saw a 6 basis point decline in average yields to 26.4%.
Debt market players remain cautiously optimistic, awaiting clearer signals from the Q3 borrowing plan, which is expected to shape market direction and investor positioning in the weeks ahead.
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