The Nigerian financial markets witnessed a significant boost in banking system liquidity on Wednesday, with available funds jumping by 40.38% to settle at ₦6.35 trillion.
This substantial increase from the previous day’s ₦4.52 trillion exerted downward pressure on the interbank market, forcing the Overnight Rate to dip by 4bps to 22.11%.
Despite this volatility in the short-term funding space, the Nigerian Overnight Federal Rate (NOFR) and Open Repo Rate remained stable, suggesting a localized concentration of excess cash within the system.
In the sovereign bond space, the FGN bond market pivoted toward a positive close as average yields fell by 3bps to 16.05%.
This bullish sentiment was largely concentrated at the short and mid-segments of the yield curve, where increased buying interest resulted in a 4bps decline in yields.
Conversely, the long end of the curve saw little movement, as investors appeared to favor shorter-duration instruments amid shifting macroeconomic expectations.
The Treasury Bills (NTB) market mirrored this optimism, with average yields edging down marginally to 17.47%.
While demand was broad-based across most tenors, the market recorded a notable outlier in the 18 March 2027 maturity, which faced sell pressure that drove its yield up by 12bps. This localized sell-off suggests specific portfolio adjustments rather than a broad shift in market direction.
On the international front, Nigeria’s Eurobonds resumed their bullish streak, with average yields contracting to 6.86%.
The market demonstrated remarkable resilience in the face of geopolitical jitters, specifically following news of the UAE’s potential exit from OPEC, which sparked uncertainty in global oil markets.
Investor confidence was bolstered by expectations that the U.S. Federal Reserve will hold interest rates steady, providing a favorable backdrop for emerging market debt.