T-Bills yield dips on enhanced appetite for Naira assets as FG plans to reduce dependence on borrowing

The average yield on Nigerian treasury bills fell to 18.10% per annum in the secondary market due to increased bets on the naira asset ahead of midweek auction just as the Federal Government plans to rely more on domestic resources and reduce its dependence on borrowing.
Minister of Finance Wale Edun said this while speaking on Bloomberg Television at the World Economic Forum in Davos, Switzerland, on Tuesday.

Edun emphasized the need to focus on revenue generation.
He added that while the country could access international bond markets, if necessary, the government’s priority is to mobilize its own resources.

The minister’s remarks come as Nigeria implements fiscal reforms aimed at strengthening its economy.

Edun outlined the government’s efforts to raise tax revenue and strengthen fiscal sustainability amid mounting global economic pressures.

He also highlighted strategies aimed at reducing borrowing while expanding revenue generation.

“The issue now is to focus on revenue, focus on domestic resource mobilization,” he said. We’re hoping to rely less on borrowing,” he added.

The soft hunting for strong yield naira assets in Nigeria money market improved as system liquidity condition in the money market continued to underpin investor activity across the curve.

Traders at AIICO Capital Limited reported that activities remained calm with limited repositioning across the curve. Notably, most tenors closed flat relative to prior levels, reflecting balanced demand and supply dynamics.

Investors observed a mild buying interest on the long-dated 07-Jan-27 bill, where the discount rate eased by 15bps to 17.51%, while other maturities remained unchanged. Consequently, the average benchmark rate eased.

Yields contractions were observed across the short (-2bps), mid (-2bps) and long (-3bps) segments of the curve.
The average yield on Treasury bills fell by 4 basis points 18.10%, signalling improved investor confidence and a more supportive environment in the secondary market.

On behalf of the Central Bank, the Debt Management Office is scheduled to offer ₦1.15 trillion worth of bills in its second primary market auction for the year on Wednesday.

The offer will be split across the 91-day (₦150.00 billion), 182-day (₦200.00 billion) and 364-day (₦800.00 billion) bills. Proceedings in the OMO market had a similar outing as average benchmark yield declined by -4bps to close at 22.21%.