Yields on Nigerian Treasury bills continued to trend lower in the secondary market, slipping beneath the 17% threshold as sustained demand for the short-term government debt instrument intensified. Despite the decline, returns on the bills still outpaced headline inflation, widening the real interest rate available to investors.
Market analysts expect spot rates to face further downward pressure across the fixed-income curve as Nigeria’s ongoing disinflation reinforces expectations of monetary policy easing at the Central Bank’s final policy meeting of the year.
Investors were observed making early moves ahead of the upcoming primary market sale, where the Debt Management Office is scheduled to offer ₦700 billion worth of Treasury bills. With liquidity levels remaining elevated, fixed-income analysts project robust participation at the auction.
Based on recent market patterns, traders anticipate a strong tilt toward the 364-day instrument. With headline inflation easing to 16.05%, the market is preparing for notable rate adjustments at Wednesday’s auction, which could produce a real return of around 11%.
Fresh CPI data from the National Bureau of Statistics showed inflation slowing for yet another month, dropping to 16.05% year-on-year in October from 18.02% in September, reinforcing the downward trend.
The steady cooling of inflation has increased calls for the Central Bank of Nigeria to begin reducing its benchmark monetary policy rate, currently at 27%, significantly above the latest inflation reading.
Driven by upbeat market sentiment, traders reported a two-basis-point drop in the average yield of secondary market Treasury bills, settling at 16.96%.
Cordros Capital confirmed yield contractions along the short (-2 bps), mid (-2 bps), and long (-3 bps) ends of the curve. The decline was busiest in paper maturing in 80 days (-2 bps), 171 days (-2 bps), and 353 days (-3 bps).
However, in the OMO segment, yields moved in the opposite direction, climbing by 4 bps to close at 21.8%.
