Nigerian Treasury Bills (NTBs) edged lower across all maturities at the close of trading on the FMDQ Securities Exchange on Monday, October 20, 2025, reflecting sustained demand for short-term government instruments amid tight system liquidity.
According to FMDQ market data, average NTB yields dropped by an average of three basis points across all maturities.
The 6-November 2025 bill closed at 16.60%, down from 16.63% previously, while the 4-December 2025 paper eased to 17.54% from 17.57%.
Similarly, yields on the 5-February 2026 and 9-July 2026 bills dipped slightly to 16.88% and 17.71% respectively. The longest tenor bill, maturing 8-October 2026, saw yields decline to 17.82%, compared to 17.85% at the last close.
Analysts attributed the moderation in T-bills yields to renewed investor appetite for risk-free instruments, driven by expectations that the Central Bank of Nigeria (CBN) may maintain current monetary policy easing as inflationary pressures slow.
“The minor yield compression reflects the current dynamics of the economy, where you see key economic fundamentals strengthening. The market is beginning to price in the improving outlook. To that extent, yield is moderating,” said David Adonri.
OMO Bills extend yield softening trend
The Open Market Operation (OMO) segment also mirrored the T-bills trend, with yields easing across most maturities. The 4-November 2025 OMO bill closed at a yield of 20.63%, down 0.03 percentage points from the previous session. The 2-December 2025 instrument fell to 23.53% from 23.56%, while the 6-January 2026 paper moderated to 21.79%.
Longer-dated OMO papers, such as the 14-April 2026 and 7-July 2026 maturities, closed at 20.55% and 19.28% respectively, both recorded mild declines. Dealers said the downward movement reflected selective buying by banks and asset managers amid thin market liquidity and moderate inflows from maturing instruments.
FGN Bonds trade mixed as yields hold stable
The Federal Government bond traded mixed, with yields largely unchanged across benchmark maturities. The 17-March 2027 bond maintained a yield of 16.02%, while the 20-March 2027 note slipped marginally by seven basis points to 15.89%. Similarly, the 15-May 2033 bond fell 13 basis points to 15.98%.
However, moderate gains were recorded at the mid-curve segment, where the 23-February 2028 and 20-March 2028 bonds rose slightly by six and twelve basis points, closing at yields of 16.20% and 16.19% respectively. Longer-tenor bonds such as the 27-March 2050 and 21-June 2038 issues remained stable at 15.46% and 15.65%.
Market traders noted that sentiment in the bonds market stayed cautious, with investors balancing between reinvestment of coupon payments and expectations of fresh issuances from the Debt Management Office (DMO) on 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 remarked.
Money market liquidity tightens slightly
In the money market, rates moderated slightly despite persistent liquidity strain. The Open Repo (OPR) rate fell by 0.04 percentage points to 24.50%, while the Overnight (O/N) rate declined by 0.21 percentage points to 24.86%.
Traders attributed the moderation to marginal inflows from bond coupon payments, which temporarily eased funding pressures in the interbank market. Nonetheless, liquidity conditions remained tight, with average system liquidity estimated below N100 billion.
Overall, the fixed-income market maintained a cautious tone, with participants closely monitoring liquidity trends and upcoming CBN auctions for fresh cues. Analysts expect yields to broadly moderate in the short term in view of significant policy shifts and persisting liquidity glut.
