The average yield on Nigerian Treasury bills has decreased by 5 basis points, settling at 25.7% in the secondary market, following an increase in inflation for November 2024. This reduction comes as demand for naira assets surged, despite the recent uptick in consumer prices.
The ongoing rise in the consumer price index has further widened the real return on Treasury bills, even after the recent adjustment of the benchmark interest rate. With inflation now at 34.60% and the policy rate raised to 27.50%, the gap between nominal and real returns on Treasury bills has surpassed 7%.
In the secondary market, trading began the week with a steady yet slightly bullish sentiment. Activity remained relatively quiet, with minimal trades executed across the long end of the curve. The yield saw a decline across short (-5bps), mid (-5bps), and long (-6bps) segments, primarily driven by demand for bills maturing in 80, 129, and 339 days.
Fixed-income market analysts noted a slight moderation in yields across the curve, with long-dated maturities such as 4-Sep, 9-Oct, and 6-Nov recording the most significant declines, each dropping by 6bps due to increased investor interest.
The average benchmark yield closed at 25.57%, marking a 5bps decrease. Analysts predict that the current market conditions will likely persist in the coming sessions. Similarly, the average yield in the OMO bills segment also declined by 6bps, reaching 27.2%.
