By Atoyebi Nike
Yields on Nigerian Treasury Bills (NTBs) edged lower across all maturities on Monday, October 20, 2025, as sustained demand for short-term government instruments persisted despite tight system liquidity.
According to market data from the FMDQ Securities Exchange, average NTB yields declined by about three basis points across maturities. The 6-November 2025 bill closed at 16.60%, down from 16.63%, while the 4-December 2025 paper eased to 17.54% from 17.57%.
Similarly, yields on the 5-February 2026 and 9-July 2026 notes slipped to 16.88% and 17.71%, respectively. The 8-October 2026 tenor the longest on the curve also fell slightly to 17.82% from 17.85%.
Analysts attributed the mild yield compression to renewed appetite for risk-free assets amid expectations that the Central Bank of Nigeria (CBN) will sustain its current monetary stance as inflation shows early signs of moderation.
“The minor yield compression reflects the current dynamics of the economy, where key fundamentals are strengthening. The market is beginning to price in the improving outlook,” said David Adonri, a market analyst.
The Open Market Operation (OMO) segment mirrored the trend, with yields easing across most maturities. The 4-November 2025 OMO bill closed at 20.63%, down 0.03 percentage points, while the 2-December 2025 and 6-January 2026 instruments slipped to 23.53% and 21.79%, respectively.
Longer-dated OMO papers the 14-April 2026 and 7-July 2026 maturities closed at 20.55% and 19.28%, both reflecting mild declines. Dealers linked the movement to selective buying by banks and fund managers amid moderate inflows from maturing instruments.
In the Federal Government bonds market, performance was mixed. The 17-March 2027 bond remained steady at 16.02%, while the 20-March 2027 note declined marginally by seven basis points to 15.89%. The 15-May 2033 bond also eased to 15.98%, while mid-curve tenors like the 23-February 2028 and 20-March 2028 issues rose slightly to 16.20% and 16.19%. Long-tenor papers including the 27-March 2050 and 21-June 2038 bonds were unchanged at 15.46% and 15.65%.
Market sentiment remained cautious, with investors weighing reinvestment options against expectations of fresh issuances from the Debt Management Office (DMO) scheduled for Wednesday, October 22.
“The yield environment is consolidating after weeks of volatility; most investors are waiting for direction from the next auction calendar,” one Lagos-based dealer told The North Journals.
Meanwhile, in the money market, funding rates eased slightly despite strained liquidity. The Open Repo (OPR) rate fell to 24.50%, while the Overnight (O/N) rate declined to 24.86%, following marginal inflows from bond coupon payments.
Liquidity conditions, however, remained tight, with average system liquidity estimated at below ₦100 billion.
Overall, the fixed-income market maintained a watchful tone, as traders and asset managers monitored liquidity flows and upcoming CBN auctions for cues. Analysts expect yields to moderate gradually in the short term amid improving macroeconomic indicators and cautious policy adjustments.
