Nigerian Treasury Bills Yield Sinks to 3%
The average yield on Nigerian Treasury bills (NTB) sinks further ahead of the central bank primary market auction for the week on Wednesday, according to traders’ notes. The apex bank is going to roll over maturing bills in the treasury market.
The ongoing rally in the fixed income instruments has been on the decline since late last year- yield had printed at 11% in 2022. Some local banks have been locking down funds in short term instruments amidst cash reserve ratio debits of about N1 trillion for failing to meet the apex bank loan-to-deposit ratio requirements.
Traders told MarketForces Africa that they spotted sell pressure across the short side of the curve, it was really an undercurrent to upturn the treasury bills rally.
Strong liquidity in the financial system also pushed the buying momentum, however, debit for foreign exchange auctions and outflow from banks’ cash reserves have dragged liquidity position lower.
Opening market liquidity was reported at N1.3 trillion on Friday. Call, overnight and repo rates closed within a range of 5% – 15%, as system liquidity tightened on the back of outflows from OMO and foreign exchange (FX) auctions.
With the liquidity level in the financial system, short term rates decline. The overnight lending rate contracted by 367 basis points to 10.8%, in the absence of any significant outflows from the system, Cordros Capital analysts said in a note.
in the secondary market, the Nigerian Treasury bills secondary market still remain bullish first trading day in the week as the average yield contracted by 36 basis points to 3.1%.
Across the curve, analysts said the average yield dipped at the short (-95bps) end following participants’ demand for the 45-day to maturity (-235bps) bill, but closed flat at the mid and long segments.
Elsewhere, the average yield of open market operations (OMO bills) was flat at 3.4%. # Nigerian Treasury Bills Yield Sinks to 3% >>>Nigerian Treasury Bills Yield Crashed to 3.4%