The Central Bank of Nigeria (CBN) has adjusted downward the interest rates on Nigerian Treasury Bills (NTBs) across various maturities, according to the latest results from its primary market auction.
The one-year Treasury Bill witnessed a significant decline of 101 basis points in its stop rate, reflecting the CBN’s alignment with recent monetary policy adjustments and the prevailing liquidity strength in the financial system. Interestingly, while yields on 91-day bills remained unchanged, the rates on 182-day bills recorded a mild reduction.
This auction marks the CBN’s first Treasury Bill sale for the new quarter, with a total of ₦570 billion worth of short-term government instruments offered for public subscription.
Investor participation surged significantly, with bids reaching ₦1.064 trillion, underscoring sustained interest in naira-denominated assets. Market watchers attribute the strong demand to optimism that inflationary pressures may continue to ease in the coming months, coupled with excess liquidity circulating within the financial system.
Investors also anticipated that the CBN might reprice yields to reflect improved macroeconomic fundamentals, prompting robust demand, particularly for longer-term instruments.
A breakdown of the auction results revealed that the 364-day bills recorded the highest subscription levels, attracting bids worth ₦986.33 billion compared to the ₦350 billion initially offered. Out of this, the apex bank allotted ₦503.30 billion worth of one-year instruments to successful investors at a stop rate of 15.77%, a sharp drop from 16.78% recorded at the previous auction in the third quarter.
In the mid-tenor category, the CBN sold ₦41.33 billion worth of 182-day bills at 15.25%, slightly down from 15.30% in the previous auction. The total subscription for this tenor stood at ₦52.12 billion, surpassing the ₦120 billion offer size.
For the short-term end of the curve, the 91-day bills maintained stability, with the CBN allotting ₦25.37 billion at a 15% stop rate — unchanged from the last auction. The tenor attracted a total subscription of ₦25.97 billion, highlighting steady demand for shorter-duration instruments.
Analysts suggest that the yield adjustments mirror the CBN’s effort to balance liquidity management with market expectations, especially as monetary authorities maintain a cautious stance amid evolving economic indicators.
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