By Boluwatife Oshadiya | July 31, 2026
Key Points
- Treasury bill yields edge lower after investors redirect unmet auction demand to the secondary market
- DMO rejects more than ₦2.4 trillion despite receiving ₦3.62 trillion in subscriptions
- Strong demand for 364-day bills keeps investor appetite elevated amid high interest rates
Main Story
Nigerian Treasury bill yields declined in the secondary market as investors increased demand for newly issued securities after the Debt Management Office (DMO) rejected more than ₦2.4 trillion in bids during its midweek Treasury bills auction.
Trading activity remained broadly positive, with yields easing across the curve as investors sought to deploy excess liquidity following the auction. The strong demand reflects continued appetite for fixed-income instruments amid Nigeria’s elevated inflation and high-interest-rate environment.
At the auction, the DMO offered ₦700 billion worth of Treasury bills but received subscriptions totalling ₦3.62 trillion, eventually allotting ₦1.25 trillion, underscoring robust investor demand.
According to AIICO Capital Limited, yields on the newly issued 29 July Treasury bills declined to 17.00%, while the average benchmark discount rate remained unchanged at 16.66%.
Market participants redirected unsuccessful bids into the secondary market, boosting demand for the newly issued securities. Analysts noted that interest was strongest in the 364-day Treasury bills, enabling the DMO to reprice the discount rate during the auction.
Herwood Capital Limited said the newly issued 29 July 2027 Treasury bills opened trading at 17.20%/17.05%, with transactions executed at 17.10%, 17.07% and 17.02% before closing the session at 17.10%/17.05%.
“Strong demand for the newly issued Treasury bills reflects investors’ continued preference for high-yield government securities in the current interest-rate environment,” Herwood Capital Limited said in its market commentary.
The firm added that average Treasury bill yields compressed by one basis point to 18.15% at the close of trading.
What’s Being Said
AIICO Capital Limited said yields on the newly issued 29 July Treasury bills eased to 17.00%, while the benchmark discount rate held steady at 16.66%, reflecting sustained demand in the secondary market.
Herwood Capital Limited noted that “strong demand for the newly issued Treasury bills reflects investors’ continued preference for high-yield government securities in the current interest-rate environment,” adding that average market yields narrowed marginally during trading.
What’s Next
- Investors will monitor the DMO’s next Treasury bills auction for indications of further repricing.
- Market participants will continue assessing inflation and monetary policy expectations ahead of the Central Bank of Nigeria’s next Monetary Policy Committee meeting.
- Fixed-income yields are expected to remain sensitive to liquidity conditions and government borrowing requirements.
The Bottom Line: Oversubscription at the latest Treasury bills auction highlights continued investor demand for government securities despite elevated interest rates. Unless inflation slows significantly or monetary policy eases, Treasury bills are likely to remain among the most attractive low-risk investment options in Nigeria’s fixed-income market.
 rejected more than ₦2.4 trillion in bids during its midweek Treasury bills auction.){kind=link}