The average yield on Nigerian Treasury bills declined by four basis points, settling at 22% in the secondary market on Monday. This drop was largely due to increased buying activity by investors who anticipated a decline in the inflation rate.
Before the release of the latest inflation data, trading activities had slowed down as investors awaited the new figures. When the inflation rate was announced to have dropped significantly, it sparked renewed buying interest in Treasury bills, particularly for long-term maturities.
Market analysts reported that the biggest movements were observed in the long-term Treasury bills, with notable demand for the 6-November and 8-January maturities, which saw their yields decline to 24.59% and 23.08%, respectively.
According to investment firms Cordros Capital and TrustBanc Financial Group, the benchmark yield on Treasury bills dropped by an average of 4 basis points across different maturity periods. Short-term (80-day), mid-term (176-day), and long-term (262-day) Treasury bills all saw a 4bps decline in yield due to heightened investor interest.
Similarly, in the Open Market Operations (OMO) segment, which the Central Bank of Nigeria uses to manage liquidity, average yields dropped by 6 basis points to 26.4% in response to increased demand.
