Yields on naira assets ended mixed on Tuesday, as banks trimmed their Treasury bills positions to bolster daily liquidity amid tighter funding conditions in the financial system.
OMO bill yields eased slightly in the secondary market, supported by demand from both foreign portfolio investors and local banks. However, trading in Treasury bills was bearish, with yields climbing as lenders sold off positions to meet funding needs.
The portfolio adjustments left market rates moving in opposite directions — OMO yields were squeezed, while Treasury bill yields rose.
OMO yields dipped after the Central Bank of Nigeria (CBN) allotted ₦2.12 trillion worth of bills to eligible local and foreign investors at its latest auction, well above the initial ₦600 billion offer. The CBN maintained stop rates at 28%, with the average yield in the secondary market slipping six basis points to 24.5%.
Analysts expect the CBN to sustain tight monetary policy to keep foreign inflows steady, despite signs of disinflation. This stance has kept most debt market yields below 20%, except for OMO bills.
In the Treasury bills segment, the secondary market closed bearish as shrinking system liquidity pushed yields higher. The yield on the 06 Nov 2025 maturity rose six basis points to 16.79%, while the 06 Aug 2026 eased marginally by one basis point to 19.49%.
Across the curve, average yield fell one basis point at the short end, driven by demand for the 86-day bill, but rose seven basis points at the mid-segment due to an 80-basis-point selloff in the 163-day paper. The long end was unchanged.
