DMO increases bonds Offer for August by 100%

Debt Management Office (DMO) has increased the local bond offering size for August by 100%, reversing the extremely tight supply in the recent past. In a circular, the DMO announced its monthly auction for August will be held on August 25 amidst downward yield movement in the secondary market, reflecting sustained appetite for the naira assets. Local bond supply had been tightened as the authority seeks to diversify borrowing sources and reduce government costs of borrowings. The lower bond supply via primary market auction sales has forced yields to decline across tenors as investors locked in yields. The hefty bargain hunting in the secondary market dragged the benchmark yield on FGN bonds below 17%, helped by disinflation and improving macroeconomic indicators.
At the main auction in July, the DMO offered two reopening bonds. Local bonds with 3 years and 9 months to maturity totalling N40 billion will be offered for subscriptions. 
The authority also opened 6 years and 11 months to maturity, totaling N40 billion, to be available for subscription. The updated circular now revealed that Nigeria plans to offer N80 billion to N120 billion in fresh bonds with five years to maturity. The authority will also reopen FGN bonds with 6-year-to-maturity bonds between N80 billion and N120 billion for investors’ subscription at the August 25 auction. Traders reported that the fixed income market sentiment weakened further as the market digested the revised bond auction.Market sentiment turned bearish on Friday, with yields repricing significantly higher by midday across the curve. This shift followed the DMO’s revised issuance calendar, which indicated a larger offer size and replaced the Apr 2029 with a new Aug 2030 instrument.
In line with the direction of analysts’ projections, headline inflation moderated by 34 bps to 21.88% year-on-year from 22.22% in June 2025, marking the fourth consecutive month of disinflation, largely driven by favourable base effects. This indicates that inflationary pressure persists, albeit at a slower pace. Meanwhile, headline inflation inched up by 31 bps to 1.99% on a month-on-month basis, reflecting higher price increases in July when compared to the average price growth recorded in June.