The Nigerian Treasury Bills (T-Bills) market witnessed increased demand last week as investors strengthened their positions ahead of the Central Bank of Nigeria’s (CBN) upcoming monetary policy decision.
Market participants are divided over whether the apex bank’s Monetary Policy Committee (MPC) will cut rates to spur economic activity, a view supported by the trend of slowing inflation. Despite this, the country’s benchmark policy rate remains elevated at 27.50%, delivering a 7.38% real return on naira-denominated assets.
This policy uncertainty fueled buying momentum in the secondary T-Bills market, leading to a bullish performance as the average yield contracted by 7 basis points to settle at 18.41%.
According to CardinalStone Securities, investors showed strong preference for instruments maturing on 25 December 2025 and 3 September 2026, dragging their yields lower by 72 basis points and 55 basis points, respectively—the sharpest declines across the curve.
Additional buying interest was observed in the T-Bill maturing on 4 December, quoted at 17.78%/17.17%, as well as the 6 August instrument. On the OMO segment, moderate trading activity centered on the 7 April and 3 March maturities, which pushed the average OMO yield down by 4 basis points to 22.0%.
Across the yield curve, the decline was broad-based. Cordros Capital reported contractions of 2 basis points, 11 basis points, and 7 basis points across the short, mid, and long segments, respectively. The strongest demand was for papers with 80-day, 94-day, and 346-day maturities.
AIICO Capital Limited advised investors to remain cautious despite the ample liquidity in the financial system, noting that trading sentiment is likely to remain conservative until the MPC provides clear guidance on interest rate direction.
 market witnessed increased demand last week as investors strengthened their positions ahead of the...){kind=link}