By Boluwatife Oshadiya| July 21, 2026
Key Points
- Nigerian Treasury bill yields fell by three basis points to 18.37% as investors increased buying across the secondary market
- Strong demand followed the CBN’s repricing of the 364-day Treasury bill to 17.66% at last week’s primary market auction
- Lower inflation and expectations that the Monetary Policy Committee will hold rates steady continue to support demand for fixed-income assets
Main Story
Nigerian Treasury bill yields declined on Monday as investors increased purchases of naira-denominated fixed-income securities in the secondary market, extending strong demand recorded after last week’s Treasury bills auction.
Average Treasury bill yields contracted by three basis points to 18.37%, according to fixed-income market data, as buying interest strengthened across short- and medium-term maturities. The renewed demand followed the Central Bank of Nigeria’s (CBN) decision to reprice the 364-day Treasury bill at 17.66% during last week’s auction, which attracted significant investor subscriptions amid ample liquidity in the banking system.
Market activity was concentrated on the 3 June 2027, 17 June 2027, and 15 July 2027 Treasury bills, which traded around offer yields of 17.30%, 17.35%, and 17.45%/17.35%, respectively.
Investor appetite has also been supported by improving macroeconomic conditions. Nigeria’s headline inflation eased to 15.91%, while market participants broadly expect the CBN’s Monetary Policy Committee to retain the benchmark interest rate at 26.50% when it next meets, preserving attractive real returns on fixed-income investments.
Activity in the Open Market Operations (OMO) segment remained relatively subdued, with mild demand recorded for the 24 November 2026 and 8 December 2026 OMO bills, quoted at 20.10%/19.90% and 19.57% bid, respectively.
“Buying interest was concentrated at the short end and belly of the Treasury bills curve, resulting in a modest decline in average market yields,” Herwood Capital Limited said in its latest fixed-income market note.
What’s Being Said
Herwood Capital Limited said investor demand remained strongest across the short and medium segments of the Treasury bills curve, reflecting continued preference for quality naira assets despite moderating yields.
Market analysts also attribute the sustained demand to improving macroeconomic fundamentals, particularly easing inflation and expectations that monetary policy will remain unchanged in the near term.
What’s Next
- Investors will monitor the CBN’s next Monetary Policy Committee meeting for guidance on interest rate direction.
- The Treasury bills secondary market is expected to remain active as investors reposition ahead of future primary market auctions.
- Inflation data and liquidity conditions will continue to influence fixed-income pricing in the coming weeks.
The Bottom Line: Falling Treasury bill yields suggest investors remain confident in Nigeria’s fixed-income market despite lower returns. With inflation easing and policy rates expected to remain unchanged, demand for naira assets is likely to stay resilient over the near term.
