The average yield on Nigerian Treasury Bills (T-bills) fell by 3.5% in February due to increased demand in the secondary market. This surge in demand for naira assets came as investors saw better returns in real terms, considering market conditions.
With Nigeria’s inflation rate at 24.48% and the Central Bank of Nigeria’s (CBN) benchmark interest rate at 27.5%, investors took advantage of the situation, securing profits while T-bill rates in the primary market began to decline.
Last week, investors in fixed-income securities showed a strong preference for both short-term and long-term treasury bills, despite fluctuations in banking system liquidity. However, trading activities slowed towards the end of the week as market participants became more cautious.
The most significant drops in yields were recorded for the 10-April and 8-January maturities, with declines of 378 basis points (bps) and 18 bps, respectively, according to TrustBanc Financial Group.
Furthermore, increased demand for T-bills maturing in January and February 2026 drove yields even lower. However, due to limited availability of these securities, trading volumes remained low, AIICO Capital Limited stated in a market report.
While buying interest was high—especially for the February 5 and February 19 issues—overall market activity remained subdued due to tight liquidity. Selective trades were executed amidst these conditions.
Market analysts predict that yields will continue to trend downward based on current market dynamics. In the T-bills segment, the average yield dropped by 31 bps to approximately 19.9%, while the yield on Open Market Operation (OMO) bills fell by 244 bps to 22.5%.
Overall, the benchmark yield for T-bills decreased by 348 bps on a month-on-month basis, settling at 19.88%, TrustBanc Financial Group reported.
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