In a week marked by cautious trading and shifting market dynamics, Nigeria’s financial landscape showcased resilience, with foreign exchange reserves holding steady at
38.56billionandthenairatradingat₦1580.44/38.56 billion and the naira trading at ₦1580.44/
38.56 billion and the naira trading at ₦1580.44/in the Nigerian Foreign Exchange Market (NFEM) window. Interbank rates stood at 26.92%, reflecting tight monetary conditions, while liquidity in the system opened at a robust ₦431.87 billion, setting the stage for an eventful week in the Treasury Bills market.
The week began quietly in the Treasury Bills market, with activity concentrated on long-tenor instruments like the April 2026 Open Market Operations (OMO) bill, quoted at a bid/offer spread of 22.00%/21.80%. Market sentiment was initially subdued, but anticipation of ₦1.1 trillion in OMO maturities sparked a shift. Investors, sensing opportunity, turned their focus to the Central Bank of Nigeria’s (CBN) OMO auction, where ₦500 billion was offered across 182-day and 210-day tenors. The auction drew significant interest, with bids totaling ₦743.25 billion, reflecting strong demand. The CBN allotted ₦655.25 billion, but stop rates surged, climbing to 23.77% (up 112 basis points) for the 182-day bill and 23.98% (up 126 basis points) for the 210-day bill, signaling tighter pricing amid heightened demand.
Mid-week, the market gained momentum. Investor interest gravitated toward the 14 April OMO bill, though offers remained scarce, creating a supply-demand imbalance. The Primary Market Auction (PMA) further underscored this appetite, with subscriptions reaching ₦1.17 trillion for a ₦500 billion offer. The CBN allotted ₦615.8 billion, maintaining stop rates for the 91-day and 182-day bills at 18.00% and 18.50%, respectively, while the 364-day bill saw a slight decline of 7 basis points to 19.56%. This stability in shorter tenors contrasted with the upward pressure on OMO rates, highlighting a nuanced market response to the CBN’s monetary stance.
By week’s end, unmet demand from the PMA fueled renewed buying interest. The newly issued 364-day bill saw bids at 19.40% and offers at 19.30%, indicating tight pricing, while trades on the 16 December OMO bill were recorded at 23.10%. The week closed on a positive note, with the average benchmark yield declining by 9 basis points to 19.98%, suggesting a slight easing in market pressures despite the earlier rate hikes.
This week’s developments paint a picture of a market navigating liquidity surges, rising rates, and selective investor enthusiasm. With FX reserves providing a stable backdrop and the CBN actively managing liquidity through OMO auctions, participants remain cautiously optimistic. However, the interplay of high interbank rates and robust demand for Treasury Bills underscores the delicate balance the CBN must strike to maintain stability while addressing inflationary pressures. As the market looks ahead, all eyes will be on how the CBN manages upcoming maturities and whether investor appetite sustains its current vigor.
