CBN Cuts Treasury Bills Rates As Oversubscription Soars Past ₦1 Trillion

In a move signaling a strategic policy shift, the Central Bank of Nigeria (CBN) has sharply reduced the spot rates on Nigerian Treasury Bills (NTBs) across all standard tenors, despite receiving an overwhelming subscription of over ₦1 trillion.

The primary market auction, overseen by the Debt Management Office (DMO) on behalf of the CBN, saw a total offering of ₦250 billion across the 91-day, 182-day, and 364-day instruments. Investor appetite surged, with total subscriptions amounting to ₦1.329 trillion, indicating robust market demand—particularly for longer-dated instruments.

Out of the total offers, only ₦201.817 billion in NTBs were eventually allotted to investors, highlighting the CBN’s cautious stance in managing liquidity while recalibrating yields.

For the 91-day maturity, the central bank proposed ₦100 billion in short-term bills but received bids totaling ₦105.07 billion. In response, only ₦59.84 billion was allotted at a revised spot rate of 15.74%, notably down from the 17.80% recorded at the previous auction.

Similarly, the 182-day tenor received ₦44.27 billion in bids for a ₦20 billion offer. However, just ₦15.67 billion was allocated, with the spot rate slashed to 16.20%, a significant drop from 18.35% in the preceding sale.

The one-year (364-day) Treasury bill segment garnered the lion’s share of interest, with the CBN offering ₦130 billion and investors placing a staggering ₦1.180 trillion in bids. Ultimately, ₦126.31 billion was allotted at a sharply reduced yield of 16.30%, compared to 18.84% previously.

This yield compression across maturities is widely interpreted by analysts as a possible signal that the CBN may be preparing to adjust its benchmark interest rate at the next Monetary Policy Committee (MPC) meeting. It also reflects broader liquidity management strategies and evolving monetary policy objectives.

The sharp contrast between demand and final allotment underscores investor confidence in government-backed securities, even as the CBN seeks to temper inflationary pressures and stabilize economic indicators.

Financial analysts suggest that the central bank’s strategy may be aligned with broader macroeconomic goals, including controlling borrowing costs for the federal government and easing pressure on the domestic debt market.