The Nigerian Treasury bills secondary market recorded a positive trading session on Tuesday, October 13, 2026, as renewed investor demand for short-term government securities pushed average yields lower.
According to the Daily Market Update released by Cordros Securities, the average Treasury bills yield declined by one basis point to 17.9 per cent.
The market recorded buying interest across short-, medium- and longer-dated instruments, reflecting demand for selected government securities.
Meanwhile, the interbank money market recorded an increase in overnight lending rates despite significant liquidity inflows from maturing Open Market Operations securities.
Treasury Bills Market Records Gains
Cordros Securities reported that the Treasury bills secondary market traded on a bullish note.
The average yield declined by one basis point across the market.
Short-term, medium-term and longer-term segments each recorded a one-basis-point decline.
The movement was supported by demand for selected instruments with 93, 163 and 359 days remaining to maturity.
The 93-day instrument recorded an eight-basis-point yield decline.
The 163-day bill experienced a one-basis-point reduction, while the 359-day instrument recorded a five-basis-point decline.
These movements indicate that investors continued to show interest in selected short-term government securities.
Why Treasury Bills Yields Decline
Treasury bills are short-term debt instruments issued by the Federal Government through the Central Bank of Nigeria.
They provide a mechanism for government financing and are also relevant to monetary and liquidity management.
In the secondary market, the prices of Treasury bills generally move in the opposite direction to their yields.
When demand for existing bills increases and prices rise, the yield available to new buyers may decline.
Consequently, falling yields can reflect stronger demand.
However, the latest one-basis-point decline was modest and does not by itself establish a sustained market trend.
OMO Market Moves in Opposite Direction
While Treasury bills yields declined, the Open Market Operations segment recorded a different performance.
According to Cordros, the average OMO yield increased by three basis points to 18.6 per cent.
OMO securities are used by the Central Bank of Nigeria to manage liquidity within the financial system.
Changes in their yields can influence investment decisions and short-term funding conditions.
The increase suggests that trading conditions in the OMO segment differed from those affecting conventional Treasury bills.
Overnight Lending Rate Rises
The interbank money market also recorded an increase in overnight lending rates.
The rate table in the Cordros report showed that the overnight rate rose by nine basis points from 20.72 per cent on October 12 to 20.81 per cent on October 13.
The increase occurred despite liquidity inflows from OMO maturities.
The report placed the value of those maturities at approximately ₦2.41 trillion.
The overnight lending rate reflects the cost of very short-term borrowing between financial institutions.
Changes in the rate can indicate shifts in funding conditions.
However, the relationship between system liquidity and overnight rates can be influenced by the distribution of funds across institutions and other market factors.
Liquidity Inflows Remain Significant
The reported ₦2.41 trillion in OMO maturities represents a substantial liquidity event.
When OMO securities mature, funds are returned to holders according to the terms of the instruments.
These payments can increase the amount of liquidity available within the financial system.
However, other transactions may offset the effect of such inflows.
The Cordros report did not provide a complete breakdown of all liquidity movements during the session.
Latest Treasury Bills Auction Provides Context
The market update also contained figures from the Treasury bills auction conducted on October 7.
The 91-day Treasury bill stop rate remained unchanged at 15.50 per cent.
The 182-day stop rate also remained at 15.80 per cent.
However, the 364-day stop rate declined to 15.85 per cent from 15.89 per cent at the September 23 auction.
The value of securities allotted increased to ₦968.47 billion from ₦497.58 billion at the previous auction.
The figures provide context for investor participation in the primary Treasury bills market.
Primary and Secondary Market Rates Differ
Investors should distinguish between Treasury bills auction stop rates and secondary market yields.
Auction stop rates apply to newly issued securities.
Secondary market yields reflect the prices at which existing securities are traded.
These rates can differ because of changes in market demand, remaining maturity and other factors.
The average secondary market yield of 17.9 per cent therefore should not be interpreted as the stop rate for every Treasury bill issued by the government.
Outlook Depends on Liquidity and CBN Operations
The performance of the Treasury bills market in subsequent sessions will depend on domestic liquidity, investor demand and monetary policy operations.
Further government securities issuance could influence the availability of funds.
At the same time, demand from financial institutions and other investors may support prices.
For now, the October 13 report indicates modest buying interest in Treasury bills alongside an increase in overnight interbank lending costs.
The contrasting movements highlight the different forces influencing Nigeria’s short-term financial markets.
