The average yield on Nigerian Treasury bills has dropped by 5 basis points, reaching 25.7% in the secondary market, after November 2024’s inflation rise. This decline follows a surge in demand for naira assets, despite the recent increase in consumer prices.
Even with the recent change in the benchmark interest rate, the real return on Treasury bills has increased due to the continuous increase in the consumer price index. With the policy rate increased to 27.50% and inflation currently at 34.60%, the difference between nominal and real returns on Treasury bills has grown to more than 7%.
In the secondary market, trading began the week with a steady yet slightly bullish sentiment. Activity remained relatively quiet, with minimal trades executed across the long end of the curve. The yield saw a decline across short (-5bps), mid (-5bps), and long (-6bps) segments, primarily driven by demand for bills maturing in 80, 129, and 339 days.
Fixed-income market analysts noted a slight moderation in yields across the curve, with long-dated maturities such as 4-Sep, 9-Oct, and 6-Nov recording the most significant declines, each dropping by 6bps due to increased investor interest.
The average benchmark yield dropped 5 basis points to close at 25.57%. The current state of the market is expected to continue in the upcoming sessions, according to analysts. In a similar vein, the OMO bills segment’s average yield dropped 6 basis points to 27.2%.
