Nigerian Treasury Bills Stay Cold As Rates Slump

LBS Discloses FG's Targets With Naira Redesigning

In the lack of liquidity pressures in the financial system, the Nigerian Treasury Bills (NTB) did not record any noteworthy transactions that may have shifted the yield curve to the left or the right.

Although there is still liquidity in the market, funding rates were stabilized in anticipation of possible cash reserve requirements enforced by the apex bank. The overnight lending rate remained at 12.3%, according to analysts at Cordros Capital, who also noted that the system liquidity ended the day with a net long position of N162.63 billion.

The Nigerian Interbank Offered Rate (NIBOR) climbed uniformly for all tracked maturities, according to market experts at Cowry Asset Management, as measures of money market stress tightened and banks with liquidity requested higher rates.

Benchmark rates for short-term transactions: the overnight lending rate was steady at 12.25% while the open repo rate moderated by 25 basis points to 11.50%.

Trading activity on the Nigerian Treasury bill was very low in the secondary market. As spot rates continue to fall, market participant indifference has become increasingly obvious.

Local banks held to their investment securities holdings, and instead pitched their tents at the Central Bank of Nigeria (CBN) standing lending facility (SLF) to close the liquidity gap.

Also, asset/fund managers shy away from increasing their position amidst rising inflation rates, in addition to rate hikes spurred by monetary policy tightening.

Yet, return on investment across the fixed income market remained exposed to an accelerating inflation rate in the country.

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