Money Market set for N30.22bn Net Issuance Gap

This week, the Nigerian money market is set for a net issuance gap of N30.22 billion.

This is expected as the Central Bank of Nigeria (CBN) is scheduled to conduct a treasury bills auction in the coming week, offering a total of N400 billion across standard maturities.

According to market participants, this supply will be met with maturities worth N369.78 billion, creating a net issuance gap of approximately N30.22 billion.

Given the prevailing liquidity conditions and anticipated investor interest, this week’s auction is likely to attract significant participation and will provide critical signals for the near-term direction of short-term interest rates.

Investors and market analysts will be closely watching the auction outcome to gauge the CBN’s monetary policy stance and its implications for the broader economy.

Meanwhile, the average yield on Nigerian Treasury bills pulled back in the secondary market due to the latest round of bargain hunting for naira assets amidst signs of disinflation.

Nigeria’s inflation soared by 105 basis points to 24.23 per cent, based on the rebased Consumer Price Index (CPI) data from the National Bureau of Statistics, up from 23.18 per cent in February. On a month-on-month basis, consumer prices increased by 3.90 per cent.

The market has been reacting to these developments, with some analysts suggesting the monetary policy may remain tight in response to shifting global sentiment.

In the secondary market, trading activity was light across maturities, although the long end saw relatively stronger demand, with the December 2025 and March 2026 bills attracting the most attention.

Investment firm AIICO Capital Limited reported that the limited transactions executed were primarily retail-sized, while the benchmark NTB average mid-rate edged lower.

Fixed-income market analysts expect the current sentiment to hold steady through Thursday, although trading activity may moderate as participants prepare for the Easter holiday.

Yields moderated slightly across the curve, particularly at the long end. Notably, the 19-Feb bill was quoted at 19.70/19.20 percent, compared to 19.50/19.00 percent at the start of the session, according to an investor note from TrustBanc Financial Group Limited.

Despite the overall bullish sentiment, the 5-Feb bill saw notable selloffs, quoted at 19.69/19.19 percent, compared to 19.49/18.99 percent earlier in the day. Overall, the average benchmark yield closed at 20.93 percent.

Across the curve, the average yield declined at the short (-9 bps) and mid (-1 bp) segments, following demand for the 86-day to maturity (-55 bps) and 177-day to maturity (-1 bp) bills, respectively.

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