Nigeria’s Fixed-Income Market Shifts as Rates Fall and Foreign Interest Returns

September brought major changes to Nigeria’s fixed-income market. The Central Bank of Nigeria cut the Monetary Policy Rate from 26.5% to 23%, its first reduction in more than a year. The move was widely seen as the beginning of an easing cycle. Treasury-bill yields fell sharply, with the one-year bill dropping from 17.15% to 15.89% within three weeks. Investors submitted more than ₦4.2 trillion in bids for about ₦1 trillion worth of bills offered. Demand for Open Market Operations bills reached ₦20.6 trillion after access was expanded beyond banks. Meanwhile, investors favoured short-term bills over longer-dated FGN bonds, pushing average bond yields to about 15.7%. Nigeria’s return to a major local-currency bond index, alongside an equity-market upgrade, could strengthen foreign investor interest in Nigerian assets.

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