FG Long-term Bonds’ Yields Rise, As Liquidity Shrinks

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The yields on Federal Government’s 20-year and 10-year long term bonds rose on Wednesday after currency purchases of the Central Bank of Nigeria (CBN) were pre-funded for commercial lenders’ accounts.

According to the market report, yields on the 20-year bond rose to 13.8 percent, up 29 basis points from its previous close; while the 10-year bond rose by 23 basis point to 13.35 percent as liquidity thinned out.

Liquidity in the banking system opened at N385 billion ($1.93 billion) from a high of N1 trillion it opened last week forcing bonds to rise as injection by the CBN lowered.

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Liquidity shrunk on Wednesday after the CBN paid off currency purchases on behalf of customers and mopped up government funds from the system to dropped from N1 trillion to N385 billion.

An analyst who spoke with Reuters said, “Liquidity is slowing down the buying spree.”

See Also: How Nigeria’s Lending Rates Rose By 4.5 Percent


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