by Grateful Ogunjebe
Yields on Nigerian Treasury Bills (NTBs) and Open Market Operations (OMO) instruments fell across most maturities on Monday, as trading on the FMDQ Securities Exchange pointed to a broad downward trend in fixed income pricing.
Market data from the session indicated declines across short- to mid-term instruments, with benchmark NTBs maturing in January and March 2026 recording the sharpest drops. The NTB 8-Jan-2026 fell by 6 basis points to 17.88 per cent, while the NTB 5-Mar-2026 slipped by 17 basis points to 18.70 per cent.
OMO instruments followed a similar pattern, with the 4-Nov-2025 maturity easing by 6 basis points to 26.43 per cent. Other OMO bills also saw yields dip by around 5 basis points as investors continued to reassess risk against monetary policy expectations and persistent inflationary pressures.
Despite easing yields, money market rates remained high. The Open Buy Back (OPR) rate closed at 32.42 per cent, up 8 basis points, while the Overnight (O/N) rate climbed by 17 basis points to 32.83 per cent. These elevated interbank rates underscore sustained liquidity tightening by the Central Bank of Nigeria (CBN), which has maintained a hawkish stance to contain inflation and stabilise the naira.
In the bond futures market, settlement prices for 2-year and 10-year Federal Government of Nigeria (FGN) bonds showed mixed sentiment. The 2-year 6-month contract rose to 109.27 per cent, while the 10-year 6-month contract firmed at 120.21 per cent, reflecting expectations of medium-term rate cuts or improved macroeconomic stability.
Benchmark FGN bonds across various maturities recorded mild fluctuations. The 20-Mar-2027 bond inched up in yield to 17.57 per cent, while the 21-Feb-2031 and 27-Apr-2032 bonds declined by 30 and 63 basis points, respectively. The longest-dated bond, the 21-Jun-2053, eased by 10 basis points to 15.68 per cent.
Traders attributed the fall in yields to stronger demand for sovereign instruments, likely from pension funds and institutional investors rebalancing portfolios against the backdrop of subdued equity market performance.
While easing yields indicate some investor optimism, analysts caution that persistent inflation, currently around 28 per cent year-on-year, and ongoing foreign exchange volatility could still weigh on sentiment. They stressed that upcoming monetary policy decisions will be pivotal in determining the trajectory of yields, particularly ahead of the next MPC meeting.
FMDQ data underscores how market participants continue to navigate Nigeria’s challenging interest rate landscape, balancing liquidity constraints with the pursuit of returns.