Bond Yields Rise To 15.92% As Investors Cut Demand

Yields on Nigerian government bonds climbed last week as investors adopted a more cautious stance in the fixed-income market.

The average yield on Federal Government of Nigeria bonds rose by 11 basis points week-on-week to 15.92 per cent, according to market analysts.

The increase followed weaker demand across major maturities in the secondary bond market, which pushed bond prices lower and lifted yields.

Analysts also linked the movement to the recent 3.5 percentage-point reduction in the Central Bank of Nigeria’s benchmark interest rate.

Meristem Securities said the lower policy rate could influence investors’ expectations for bond yields as the market moves into the fourth quarter.

The decline in inflation has also shaped market sentiment. Headline inflation fell to 15.39 per cent in August 2026, raising expectations of further moderation in price pressures.

However, lower inflation can reduce the real returns investors expect from fixed-income assets. This could make them more selective when considering government bonds.

Trading remained mixed across the different maturities during the week.

The yield on the five-year bond increased by 10 basis points to 16.25 per cent as selling pressure returned to the market.

The 10-year bond recorded the opposite trend, with stronger demand pushing its yield down by six basis points to 15.95 per cent.

Yields on the three-, seven- and 20-year bonds remained unchanged at 16.10 per cent, 16.07 per cent and 14.66 per cent respectively.

Despite last week’s increase, yields remain considerably higher than their levels at the start of the year.

Across the different maturities, current yields stand between 0.68 and 1.04 percentage points above their year-opening levels.

Cowry Asset Management warned that weak demand could continue to weigh on bond prices and keep yields elevated in the short term.

The asset manager, however, noted that relatively attractive yields could draw investors back if liquidity conditions improve.

Analysts expect investors to continue adjusting their portfolios across maturities as expectations around interest rates and inflation become clearer.