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FMDQ debt market size expands to ₦99.30 trillion amid falling yields.
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Treasury bills and FGN bonds record broad-based yield compression.
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Investor demand strengthens despite CBN’s tight monetary stance.
Nigeria’s fixed-income market strengthened on February 5, 2026, as declining yields across Treasury bills and Federal Government bonds pushed the total size of the FMDQ debt market to ₦99.30 trillion.
Data from the FMDQ Securities Exchange showed that improved system liquidity and reduced dependence on aggressive short-term borrowing supported the yield decline, even as the Central Bank of Nigeria maintained a tight monetary policy stance.
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Market activity reflected sustained investor appetite for government securities, with participants positioning across short-, mid- and long-term maturities as liquidity inflows from maturing instruments outweighed the dampening effect of monetary tightening.
According to the FMDQ data, yields fell broadly across the curve, with the most significant declines recorded at the longer end of the Treasury bill segment and the mid-portion of the bond curve.
Treasury bills maturing between October and December 2026 posted notable yield drops, while Federal Government bonds with maturities between 2027 and 2035 also closed lower.
Ultra-long bonds with maturities beyond 2040 remained largely flat, reflecting lingering investor caution over inflationary pressures and fiscal sustainability concerns.
Benchmark yields indicated a flatter curve around the mid-segment, as short- and medium-dated instruments attracted the strongest demand.
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Treasury bills due in the October–December 2026 window traded around 16.05 to 16.20 per cent, while mid-term bonds maturing between 2031 and 2036 were priced between 16.25 and 16.88 per cent.
Money-market conditions supported the positive sentiment, with the overnight lending rate easing to 22.80 per cent and the Open Repo Rate closing at 22.50 per cent.
The moderation was aided by liquidity inflows from maturing Central Bank Open Market Operations bills.
FGN bond futures prices remained firm across two-year and ten-year contracts, signalling expectations of near-term yield stability among market participants.
Analysts said the latest movement represents a pullback from the elevated rates recorded in late 2025 and early 2026, pointing to demand-driven yield compression rather than any shift in monetary policy.
While investors remain cautious at the long end of the curve, preference continues to tilt toward short- to mid-dated government securities, which offer a balance between attractive yields and manageable risk.
