On Thursday, the average yield on Nigerian Treasury bills fell 13 basis points to 21% in the secondary market, traders reported. According to analysts, the yield contraction was driven by increasing positioning throughout the short, belly, and long tenors of the curve.
Investors have been piling up short-term borrowing instruments before the Central Bank’s fourth-quarter main market auctions.
The CBN has announced plans to refinance N2.2 trillion in outstanding Treasury bills during the fourth quarter of the year. Spot rates on standard maturities have been declining, and with inflation rates slowing, we believe there will be further adjustments.
Disinflation that started in July has seen negative interest rate on naira asset declined to less than 7%. Inflation ended July at 33.40% as against 22.75% benchmark interest rate.
In the secondary market for T-bills, bullish sentiments persisted on Thursday. Consequently, the average yield declined by 13bps to 21.1%.
In its market update, Cordros Capital Limited said across the curve, the average yield decreased at the short (-1bp), mid (-1bp), and long (-28bps) segments following demand for the 84DTM (-1bp), 161DTM (-2bps), and 266DTM (-159bps) bills, respectively. Similarly, the average yield dipped by 2bps to 24.0% in the OMO segment.
