Yields on Nigeria’s government bond fell across maturities on Wednesday, May 25 as traders bought debt to cover their positions.
This development came a day after the Central Bank of Nigeria, CBN, kept interest rates on hold but pledged a flexible currency policy to woo foreign investors.
The apex bank after its MPC meeting on Tuesday, said it would adopt a flexible exchange rate policy, a shift from a peg for the naira seen as overvalued which had hampered growth and investment.
Bond yields fell between 11 and 46 basis points across maturities with liquid five-year debt down the most to 13.24 per cent.
Yields on the 2020 bond has been falling since last week in the run-up to the central bank meeting. Before the MPC decision, traders had taken a short position on debt, expecting the monetary policy committee to hold rates at 12 per cent to boost Africa’s biggest economy so as to tackle slowing growth.
The 20-year benchmark paper, the most traded on Wednesday, fetched 13.24 per cent, down 11 basis points from Tuesday’s close.