By Onu Okorie

Nigeria’s fixed-income market closed the trading week ended Friday, September 18, 2026, with Treasury bill yields remaining elevated, in the week ending. Also there’s strong demand for Federal Government securities and significant swings in banking-system liquidity as the Central Bank of Nigeria CBN intensified its liquidity-management operations.
The Treasury bill market remained sensitive to changing liquidity conditions and investor demand, with the average yield rising four basis points to 18.85 per cent by Friday.
The 91-day Treasury bill yield eased to 18.10 per cent, while the 180-day instrument remained at 18.86 per cent and the 365-day bill slipped to 19.77 per cent.
The movements came after about ₦5.46 trillion in liquidity sterilisation during the week, underscoring the influence of CBN open-market operations on money-market pricing.
Investor appetite for short-term government securities remained strong, with the previous Treasury bill auction attracting ₦2.64 trillion in subscriptions against ₦750 billion offered.
Of the amount subscribed, about ₦1.05 trillion was allotted, while the 364-day bill attracted approximately ₦2.54 trillion, representing a bid-to-cover ratio of about 5.07 times.
The strong demand indicates that investors continue to find Nigerian sovereign short-term instruments attractive despite the relatively high yields and tight monetary conditions.
For investors, Treasury bills offer an opportunity to lock in relatively high nominal returns over short periods, while their short maturities also reduce exposure to some of the interest-rate risks associated with longer-dated securities.
The sovereign bond market was equally active during the week, following the Debt Management Office’s September 14 auction.
The DMO offered ₦1 trillion across two instruments: the new 16.79 per cent FGN September 2036 bond and the reopened 15.45 per cent FGN June 2038 bond.
Investors submitted a combined ₦1.49 trillion in bids, representing about 1.49 times the amount offered.
The DMO allotted ₦748.64 billion through the competitive auction, comprising about ₦288.63 billion from the new 2036 issue and ₦460.01 billion from the reopened 2038 bond.
The result showed continued demand for longer-dated government securities despite the prevailing high-interest-rate environment.
The new 2036 bond cleared at a marginal rate of 16.79 per cent, while the reopened 2038 bond cleared at 16.85 per cent. The latter represented a substantial decline from the 17.79 per cent marginal rate recorded for the same instrument at the previous auction.
The lower clearing rate on the reopened bond suggests some moderation in investors’ required returns on longer-term government debt.
In the secondary market, FGN bond yields were relatively stable by the end of the week.
The average FGN bond yield stood at about 16.58 per cent on Friday. The five-year benchmark eased by five basis points to 16.70 per cent, while the 10-year yield rose to 16.75 per cent.
The three-year and seven-year benchmarks remained around 16.65 per cent and 16.83 per cent, respectively.
Weekly benchmark data showed that the overall yield curve had experienced limited repricing. Average short-term and long-term benchmark yields were unchanged week-on-week at 16.60 per cent and 15.53 per cent, respectively, while the mid-term average increased marginally by one basis point to 16.72 per cent.
This is important because it shows that, despite significant day-to-day liquidity movements, investors did not substantially reprice the sovereign bond curve during the week.
One of the most notable developments during the week was the sharp movement in banking-system liquidity.
The CBN’s repayment of about ₦3.06 trillion in maturing OMO bills on September 15, followed by another substantial repayment the next day, pushed system liquidity to approximately ₦5.89 trillion on Wednesday.
The increased liquidity was subsequently absorbed through CBN operations.
By Thursday, system liquidity had fallen sharply from ₦5.89 trillion to about ₦2.03 trillion, a decline of 65.53 per cent in a single day. The overnight rate consequently increased to approximately 22.30 per cent, while the Open Repo Rate remained at 22 per cent.
System liquidity rebounded 40.74 per cent from Thursday’s ₦2.03 trillion to ₦2.86 trillion, with the OPR and overnight funding conditions remaining around 22 per cent.
Importantly, the 40.74 per cent figure represents a Thursday-to-Friday increase, not the weekly movement.
On a week-on-week basis, system liquidity increased from approximately ₦2.46 trillion to ₦2.86 trillion, representing a rise of about 16.3 per cent.
The volatility demonstrates how CBN liquidity operations can rapidly alter the amount of cash available to banks and, consequently, influence short-term interest rates and fixed-income pricing.