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Nigeria’s fixed-income market strengthened on February 5, 2026, as Treasury bills and Federal Government bond yields declined across key maturities, lifting the total size of the FMDQ debt market to N99.30 trillion.

Data from the FMDQ Securities Exchange showed that improved system liquidity and reduced reliance on aggressive short-term issuance supported yield compression, pointing to softer borrowing costs despite the Central Bank of Nigeria’s (CBN) tight monetary policy stance.

Market activity reflected sustained investor demand for government securities, with participants increasingly positioning along the short-, mid- and long-tenors of the yield curve as liquidity inflows from maturing instruments outweighed the impact of monetary tightening.

FMDQ data indicate broad-based yield decline across both Treasury bills and sovereign bonds, with the most pronounced declines seen at the longer end of the NTB curve and the belly of the bond curve.

The pattern suggests growing investor comfort in extending duration amid expectations of near-term stability in funding conditions.

Taken together, the data point to improving liquidity conditions and resilient demand, even as investors remain selective about long-dated exposures.

Benchmark yields across Treasury bills and bonds closed lower across most tenors, reinforcing the bullish tone in the fixed income market.

Short- and mid-dated instruments attracted the strongest bids, consistent with investors’ preference for lower duration risk.

Benchmark Treasury Bills (NTBs): 

Benchmark FGN Bonds: 

The distribution of yields highlights a flatter curve in the belly, as investors continue to favour maturities that balance return and liquidity.

Money market indicators supported the bullish fixed income sentiment during the session.

Easing interbank rates signalled improved liquidity conditions within the banking system.

Government securities remain central to asset allocation strategies for banks, pension funds and asset managers.

Current yield levels mark a clear moderation from the elevated rates recorded in late 2025 and January 2026, when liquidity conditions were tighter and auction stop rates more volatile.

The latest market movements underline demand-driven yield compression rather than a shift in the Central Bank of Nigeria’s monetary policy stance.

Overall, the data suggest a fixed income market adjusting to improved liquidity conditions after the Central Bank of Nigeria (CBN) injected over N1.7 trillion into the financial system through a series of repayments in early February.