Yields on Nigeria’s Open Market Operations (OMO) bills edged higher in the secondary market, reaching 24.70% as investors—particularly foreign portfolio investors and local banks—continued ramping up their holdings.
According to Coronation Research, OMO instruments saw strong demand at the short and long ends of the yield curve. Yields at the short end dipped by 31 basis points to 25.53%, while the long end dropped 25 basis points to 23.49% per annum. The mid-tenor segment also witnessed a 30bps decline to 24.64%, slightly nudging the average OMO yield to 24.70% from 24.69% in the previous week.
The CBN responded to a liquidity surge—partly driven by N850 billion FAAC disbursements, which pushed total system liquidity to ₦1.35 trillion—by launching a fresh round of OMO bills on Monday. The move is designed to absorb excess funds from the banking system and ease inflationary pressure.
Market analysts project strong participation in the latest OMO auction, especially as the central bank had paused its main auction window earlier. The anticipated cash outflow is expected to tighten liquidity and encourage cautious positioning among fixed-income traders.
Meanwhile, bond traders expect yields on 2032 Federal Government bonds to hover near mid-curve levels in the secondary market. Yields on 2029 bonds could slide below the 16.00% threshold as investors shift focus toward longer-dated instruments to lock in elevated returns in what remains a relatively stable policy environment.
The Debt Management Office is presently raising ₦80 billion via 5- and 7-year bonds. Given the current rate environment and cautious market sentiment, analysts expect long-dated instruments to remain highly attractive for both local and foreign investors.
 bills edged higher in the secondary market, reaching 24.70% as investors—particularly...){kind=link}