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Nigerian t-bills yield slides to 4.3%, bonds rally

THE average yield on Nigerian Treasury bills settled at 4.34% Thursday in the secondary market with increasing liquidity pressure in the financial system. Coupled with the downward spot rates repricing trend despite Nigeria’s high inflation rate, the real return on naira assets has stayed in the negative region.

Market data shows that short-term benchmark rates rose sharply due to a massive drop in liquidity profile following debit for the Debt Management Office primary market bond auction conducted on Monday.

The financial system liquidity closed at a net short position of N235.16 billion – a strong reversal from the previous position when short-term rates were below 2%.

Money market benchmark pricing: The open repo rate ballooned 975 basis points to 21.00% from 11.25% midweek and the overnight lending rate jumped 962 basis points to 21.92%.

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Naija Times