AFRICA-DEBT-Nigerian bond yields eye MPC, Kenyan to rise

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LAGOS – Nigerian bond yields will take cue from the rate fixing meeting of the central bank on Tuesday, while yields on Kenyan Treasury bills and bonds are seen rising.


Traders said speculation over a possible reduction in the cash reserves ratio (CRR) on public sector deposits 50 percent from current 75 percent at the meeting had fuelled increased buying of bonds during the week.

“The market was bullish at some point in the week when speculations on plans by the central bank to reduce the CRR to 50 percent on public sector deposits from 75 percent filled the market,” one dealer said.

Nigeria sold bonds worth a total of 60 billion naira ($302 million) at lower yields on all tenors at an auction on Wednesday.

“Outlook on the market will depend largely on the outcome of the rate fixing MPC meeting next week,” another dealer said.[pro_ad_display_adzone id=”70560″]

Yields on the benchmark debt maturing in 2024 traded at 13.49 percent on Friday compared with 13.77 percent last week. The 2022 paper traded at 13.60 against 13.70 percent while the 2016 traded at 13.72 compared with 13.98 percent.


Traders expect yields for Kenyan Treasury bills to edge up, when the central bank sells debt worth a total of 8 billion shillings ($84 million) at separate auctions.

Kenya will also auction two-year and 10-year Treasury bonds worth up to 20 billion shillings on 20, whose proceeds will be used for budgetary support.

“There’s an auction that is coming next week from the bonds. Based on what I am seeing guys are going to be very aggressive. So generally, the (yield) curve will go up both in bonds and the Treasury bills,” said a trader at a commercial bank.

The yield on the benchmark 91-day bill inched down to 8.167 percent this week from 8.357 percent last week.

The yield on the 182-day paper climbed to 10.348 percent from 10.326 percent last week, while the yield on the 364-day bill yield rose to 10.768 percent from 10.677 percent.

($1 = 95.8000 Kenyan shillings) (Reporting by Oludare Mayowa in Lagos and Edith Honan in Nairobi; Editing by James Macharia)(Reuters)