The average yield on Nigerian Treasury bills somewhat decreased in the secondary market ahead of the Central Bank of Nigeria’s (CBN) midweek open market operation (OMO) auction schedule due to growing demand for the currency asset.
Concerns about inflation led investors to anticipate another rate change at the upcoming main market auction, which increased their desire for Treasury notes. Investors, authorized dealers, and other market players will have the opportunity to bid for N150 billion at the CBN’s primary market auction.
As investors looked to cover bids they had lost in last week’s primary market auction, trade activity in the secondary market remained positive. As a result, the average yield decreased to 2 bps from 23%.
Across the curve, the average yield declined in the short (-1 bp) and mid (-14 bp) segments, Cordros Capital Limited said in an email note. Traders attributed the yield contraction to buying interest on the 72-day to maturity (-1 bp) and 142-day to maturity (-79 bp) bills, respectively.
Conversely, the average yield expanded at the long (+3 bps) end as participants took profits off the 240-day to maturity bills, whose yield rose by 60 bps. Elsewhere, the average yield decreased by 2 bps to 24.2% in the OMO segment.
