With a high exposure to inflationary pressures, the average yield on Nigerian Treasury bills rose again as market players increased their purchases despite the banking system’s robust liquidity profile.
Analysts said in market updates distributed to investors that the overnight lending rate fell by 121 basis points to 1.36%, indicating the lack of liquidity problems following strong inflows into the system.
According to FMDQ Exchange statistics, the repo rate fell to 0.93% from 2.21% the previous day. As a result, trade in the secondary market was positive. The average or benchmark yield on Treasury notes fell 6 basis points to 7.07%.
Despite shifting market conditions, fund/asset managers and other market players are still generating inflation-exposed returns on their naira assets despite changing market dynamics – higher consume price index, and benchmark interest rate.
In its update, Cordros Capital Limited told investors that across the curve, the average yield declined at the short (-26bps) end, following demand for the 85-day to maturity (-102bps) bill.
Meanwhile, the mid and long segments remained unchanged due to a thin trading record. Notably, the three-month Nigerian interbank borrowing (NIBOR) rate experienced a significant moderation of 285 basis points, declining to 11.85% from 14.70% recorded the previous day.
