Treasury bills rally as yields dip on strong demand

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By Boluwatife Oshadiya| April 3, 2026

Key Points

• Nigerian Treasury bills market records mild rally as average yield dips to 17.66%
• Investors increase demand across the curve amid improved macro outlook
• Bond market weakens slightly with average yield rising to 15.79%

Main Story

The Nigerian Treasury bills market closed on a positive note as average yields declined marginally to 17.66%, reflecting renewed investor appetite for short-term government securities amid improving macroeconomic sentiment.

Demand strengthened in the secondary market, with investors reallocating funds across fixed-income instruments in search of optimal returns. Market participants cited expectations of easing inflationary pressures and relative stability in monetary policy as key drivers behind the sustained interest in naira-denominated assets.

Data from market participants, including Meristem Securities, showed that yields across most tenors declined by approximately one basis point, signalling broad-based buying interest. However, select instruments, particularly March 2027 bills, recorded slight yield upticks of up to nine basis points, suggesting pockets of profit-taking activity.

In contrast, the Federal Government bond market ended the session on a mildly bearish note. Yields expanded, particularly in the mid-tenor segment, with the 2033 and 2034 bonds seeing increased sell pressure. As a result, the average bond yield edged up by one basis point to close at 15.79%.

“We are seeing a gradual repositioning by institutional investors who anticipate a softer inflation trajectory and are locking into current yield levels,” said an analyst at Meristem Securities.

What’s Being Said

“The sustained demand reflects confidence in Nigeria’s fixed-income market, especially as inflation expectations begin to moderate,” said a Lagos-based fixed income strategist.

“However, the mixed movement across instruments shows that investors remain cautious about duration risk,” the analyst added.

What’s Next

• Investors will monitor upcoming inflation data for signals on yield direction
• The Central Bank’s next policy guidance is expected to influence fixed-income positioning
• Primary market auctions in the coming weeks may test demand strength

Bottom Line

The Bottom Line: The Treasury bills rally signals cautious optimism in Nigeria’s fixed-income market, but divergent movements in bonds highlight lingering uncertainty around interest rate direction and macro stability.