Nigerian Treasury bills trade cold as rates slump

The Nigerian Treasury bills (NTB) recorded no significant transaction that could swing the yield curve left or right in the absence of liquidity pressures in the financial system.

Though the market remains liquidity, funding rates were steadied ahead of potential cash reserve requirements debited by the apex bank.

In its market brief, analysts at Cordros Capital told its clients that the overnight lending rate was unchanged at 12.3%, and added that the system liquidity closed in a net long position of N162.63 billion.

Market analysts at Cowry Asset Management reported that the Nigerian Interbank offered rate (NIBOR) increased across the board for all maturities tracked as gauges of money market stress tightened and banks with liquidity demanded higher rates.

Short-term benchmark rates: the open repo rate moderated to 25 basis points to 11.50%, while the overnight lending rate, remained unchanged at 12.25%.

In the secondary market, trading activities on the Nigerian Treasury bill were relatively quiet. Market participant apathy was more pronounced as spot rates continue to decline.

Local banks held to their investment securities holdings, and instead pitched their tents at the Central Bank of Nigeria (CBN) standing lending facility (SLF) to close the liquidity gap.

Also, asset/fund managers shy away from increasing their position amidst rising inflation rates, in addition to rate hikes spurred by monetary policy tightening.

Yet, return on investment across the fixed income market remained exposed to an accelerating inflation rate in the country.