Nigeria’s Treasury bills market experienced a decline in average yield this week as increased liquidity in the banking system spurred a fresh wave of buying across the secondary market.
Market activity remained upbeat, with investors showing renewed interest in locking in available yields ahead of the fourth quarter’s planned issuances by the Central Bank of Nigeria (CBN). The sustained demand triggered a downward movement in yields, as traders positioned for potential adjustments in spot rates during the upcoming primary market auction.
According to dealers, expectations are growing that the CBN will reprice Treasury bill rates lower, following the recent policy rate cut. This expectation is further strengthened by the prevailing disinflationary environment and abundant liquidity in the financial system, which have combined to enhance investor appetite for fixed-income securities.
At the start of the week, sentiment in the Treasury bill market was notably bullish, supported by widespread demand across various maturities. Yields dropped significantly on the 05 February 2026 and 19 February 2026 maturities, sliding by 95 basis points (bps) and 22bps respectively, to close at 16.55% and 16.52%.
Data from Cordros Securities Limited indicated that the overall benchmark yield on Nigerian Treasury bills fell by 13bps to 17.8%. Analysts attributed this movement to aggressive buying pressure, particularly in the mid- and long-term segments of the curve.
A closer look at the yield curve revealed contrasting trends. The short end of the curve recorded a slight uptick of 3bps due to profit-taking on the 73-day maturity (+30bps). In contrast, the mid-section of the curve contracted by 42bps, while the long end eased by 3bps, driven by strong demand for the 157-day (-122bps) and 346-day (-3bps) bills, respectively.
Fixed-income analysts expect the rally to persist in the near term, especially as the financial system remains flush with liquidity and investors continue to favor safe short-term instruments amid moderate inflation expectations.
