Nigeria’s bond yields rose sharply on Monday, notably the longer-term authorities debt, as traders are asking for greater returns after final week’s issuances at 17.5% fee for 345-day invoice and slight will increase in shorter-dated tenors.
The buying and selling outcomes of FMDQ for Monday, December 8, confirmed vital will increase throughout Bonds and longer-dated payments traded on Monday on the secondary market, the primary main yield will increase because the Central Bank of Nigeria (CBN) began financial coverage easing in September this 12 months.
At the December 3, 2025, auctions, the Debt Administration Workplace (DMO) provided a 364-day invoice at a cease fee of 17.5%, up from 16.04%, suggesting that prices of funds or borrowings are rising.
Nevertheless, Treasury Invoice (T-bill) charges, the short-term payments, remained comparatively steady regardless of the sharp will increase in charges throughout longer-dated devices.
Bond Yields rise throughout the curve
Bond costs fell virtually throughout the board, inflicting their yields, the returns traders get for holding them, to rise.
A number of key Federal Authorities bonds recorded noticeable will increase in yields:
- The March 17 and March 20, 2027, bonds rose to 16.27% every, up by 0.54% and 0.59% respectively.
- The Feb. 23 and March 20, 2028, payments jumped by 0.68% and 0.74% to 16.46% and 16.48% respectively.
- The April 17 and 26, 2029 bonds noticed the most important jumps, with its yield climbing to 16.70%, and 16.71% 0.9 share factors greater.
- Different bonds maturing between 2031 and 2032 additionally recorded 0.60 and 0.34 share will increase.
When yields go up, it means traders are promoting off the bonds or demanding greater returns to purchase them. This often displays tight liquidity within the monetary system or rising expectations of future rates of interest.
Nevertheless, some merchants linked the event to 2 main causes: the will increase within the December 3 auctions and the approaching yuletide season that places most households on spending stress.
“The most recent public sale set the tone. Recall that DMO and CBN allotted earlier auctions at elevated charges. Subsequently, traders are asking for greater charges in keeping with the most recent charges at earlier auctions. It must be anticipated,” Mr. Blakey Ijezie, a chartered accountant and investments skilled, instructed Nairametrics.
Breaking it down, he mentioned, “In easy phrases: the federal government will now need to pay extra to borrow cash, and current bond costs fell as a result of traders need greater returns earlier than shopping for.”
T-bill Charges principally edge decrease
Whereas bonds have been beneath stress, most Treasury Payments, particularly the shorter-date ones, recorded slight drops in yields.
Examples embrace:
- 8-Jan-2026 T-bill yield dipped barely to 15.82%.
- 5-Feb-2026 dropped to 16.01%.
- 9-Apr-2026 softened to 16.25%.
These decreases have been small, between 0.02% and 0.04% however they present that consumers have been a bit extra inquisitive about short-term devices in contrast with longer-term ones.
Nevertheless, longer-dated T-bills instructed a unique story. Some noticed sharp will increase:
- The 3-Sep-2026 T-bill jumped to 18.86%, up 1.39 share factors.
- The 5-Nov-2026 T-bill rose sharply to 20.19%, up 1.51 factors.
- The 6-Aug-2026 line additionally moved greater by 1.09 share factors to 18.32%.
This implies traders are clearly demanding extra returns for locking their cash for an extended interval, even inside the T-bill market.
In accordance to Mr. Tajudeen Olayinka, some traders are promoting as a result of Christmas season to understand returns on their investments and make unavoidable purchases throughout this era.
“What we’re seeing is a traditional seasonal development. Buyers, each people and establishments, are often beneath sale stress in direction of the tip of the 12 months. All of them want money and wouldn’t thoughts promoting at low cost, whether or not it’s equities or fastened earnings belongings,” the stockbroker instructed Nairametrics.
The backstory
At its 302nd assembly in September, the CBN had lowered Financial Coverage Charge (MPR) by 50 foundation factors, reducing it from 27.5 % to 27 %.
The MPC additionally adjusted the uneven hall at the moment to +250/-250 foundation factors, narrowing it from the earlier +500/-100 vary.
These actions marked the early indicators of a cautious shift as inflation indicators confirmed delicate enchancment.
At its 303rd assembly in November, the apex bank additionally retained the MPR at 27%, sustaining its tight financial stance as a part of ongoing efforts to rein in inflation and stabilise the overseas change market.
The choice to take care of the MPR got here at a time when companies are going through excessive borrowing prices, however the CBN insists that financial self-discipline is critical to revive macroeconomic stability.
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