Nigeria’s fixed‑income market strengthened on February 5, 2026, with Treasury bills and Federal Government bond yields declining across key maturities, lifting the total size of the FMDQ debt market to N99.30 trillion.
Okay News reports that data from the FMDQ Securities Exchange showed improved system liquidity and reduced reliance on aggressive short‑term issuance, supporting yield compression despite the Central Bank of Nigeria’s tight monetary stance.
Market activity reflected sustained investor demand for government securities, with participants positioning across short, mid, and long tenors as liquidity inflows from maturing instruments outweighed the impact of monetary tightening.
FMDQ data indicated broad‑based yield declines, most pronounced at the longer end of the Treasury bill curve and the mid‑segment of the bond curve. Treasury bills maturing between October and December 2026 recorded sharp yield drops, while Federal Government bonds maturing between 2027 and 2035 also closed lower. Ultra‑long bonds beyond 2040 remained largely unchanged, reflecting caution over inflation and fiscal risks.
Benchmark yields showed a flatter curve in the belly, with short‑ and mid‑dated instruments attracting the strongest bids. Treasury bills for October–December 2026 closed around 16.05%–16.20%, while mid‑term bonds due between 2031 and 2036 traded near 16.25%–16.88%.
Money market indicators supported the bullish tone, with the overnight rate moderating to 22.80% and the Open Repo Rate closing at 22.50%. Liquidity inflows from maturing Central Bank Open Market Operations bills contributed to the easing.
FGN bond futures prices remained firm across two‑year and ten‑year contracts, signalling expectations of near‑term yield stability. Market participants continued to rebalance portfolios toward government securities amid limited alternative yield opportunities.
The latest movements mark a moderation from the elevated rates seen in late 2025 and January 2026, underlining demand‑driven yield compression rather than a shift in monetary policy. Investors remain cautious at the long end of the curve but continue to favour short‑ to mid‑dated instruments for a balance between yield and risk.
