Foreign investors have increasingly turned to Nigerian treasury bills in the first half of 2024, as money market instruments emerged as the leading contributor to capital importation during the period.
Treasury bills, in particular, were heavily oversubscribed, reflecting strong investor appetite driven by favourable yields in Nigeria’s fixed-income market.
This surge highlights how rising yields, fueled by tighter monetary policy, have drawn both foreign and domestic investors seeking short-term returns.
The Central Bank of Nigeria’s (CBN) aggressive monetary tightening—marked by multiple interest rate hikes—has significantly enhanced the attractiveness of treasury bills.
In its effort to tame inflation and stabilize the naira, the CBN raised the Monetary Policy Rate (MPR) from 18.75% in January to 26.25% by June 2024 and as of the time of writing this, the MPR is 27.25%.
The sharp rise in rates created a more appealing environment for fixed-income investments, particularly treasury bills, leading to a surge in demand.
