The Nigerian fixed income market experienced significant structural shifts as systemic liquidity in the banking sector tightened drastically, closing at a net negative position of ₦3.38 trillion.
The heavy liquidity crunch forced short-term borrowing costs upward, with the Overnight rate edging higher by 5 basis points to close at 22.21% from its previous position of 22.16%.
Conversely, the Nigerian Overnight Funding Rate (NOFR) and the Open Repo rate showed resilience against the squeeze, remaining flat at 22.00%.
In the sovereign bond market, the brief respite from losses witnessed during the previous trading session proved short-lived as performance retracted.
Driven by a wave of bearish sentiment on the long end of the curve, the average yield across Federal Government of Nigeria (FGN) bonds rose slightly by 3 basis points, landing at 17.82% up from 17.79%.
Trading dynamics across the maturities remained distinctly mixed. While short-dated and mid-tenor instruments enjoyed strong bullish demand, long-dated bonds faced notable sell pressure, driving their yields up by 14 basis points.
The domestic treasury bills segment offered a contrasting pocket of optimism, showing improved investor sentiment. The average yield across Nigerian Treasury Bills (NTB) compressed by 5 basis points to settle at 18.65% compared to its previous close of 18.70%. The market interest was particularly pronounced in the 03-Sep-2026 bill, which recorded the sharpest yield drop of the session, plunging by 30 basis points to finish at 16.96%.
On the international front, the Nigerian Eurobond market was swept by a wave of selling pressure that sent the average yield surging by 5 basis points to close at 7.09% from 7.04%.