The average yield on Nigerian Treasury Bills (NTBs) surged by 108 basis points (bps) to 25.12% on Wednesday, driven by intense selloffs from local deposit money banks in the secondary market as they sought to enhance liquidity.
This uptick followed widespread sell-offs at the mid- and long-end of the curve, with investors offloading holdings. The bearish sentiment was fueled by the Central Bank of Nigeria’s (CBN) decision to raise the benchmark interest rate by 25 bps to 27.50% during its recent monetary policy committee (MPC) meeting, sparking expectations of a repricing of yields amidst elevated inflation.
Key Market Trends
Investors shifted focus to Treasury bills at the belly of the curve, aiming to optimize returns. Bullish sentiment particularly favored NTBs maturing on 23 October and 20 November 2025.
At the latest NTB auction, the Debt Management Office (DMO) increased the spot rate for 364-day instruments by 50 bps to 23.50%. This drove heightened demand for one-year Treasury bills in the secondary market, especially from investors whose bids were unsuccessful at the auction.
Despite the recent yield increases, fixed-income instruments continue to offer negative real returns. Inflation remains high at 33.88%, well above the benchmark interest rate of 27.50%, translating to a 6.38% negative real return.
On Wednesday, the NTB market experienced bearish trading, with the average yield rising by 108 bps. According to Cordros Capital Limited, the yield expanded significantly at the short (+149bps) and long (+152bps) ends of the curve, driven by profit-taking activities on instruments with 8 days to maturity (+223bps) and 288 days to maturity (+313bps). Conversely, the mid-segment saw a slight contraction (-2bps) due to demand for the 176-day bill (-2bps).
In the Open Market Operations (OMO) segment, the average yield dipped by 2bps to 27.2%.
 surged by 108 basis points (bps) to 25.12% on Wednesday, driven by intense selloffs....){kind=link}