The Central Bank of Nigeria (CBN) has increased interest rates on Nigerian Treasury Bills (NTBs) across all tenors in its latest primary market auction, as overall demand weakened despite improved economic indicators.
This rate adjustment came unexpectedly, following recent signals of disinflation, exchange rate stability, and a previous cut in the benchmark interest rate. Analysts had anticipated a moderation in yields due to the easing inflation trend and liquidity outlook.
However, tight liquidity conditions within the financial system limited banks’ participation in the auction, dampening overall subscription levels. Market observers noted that a stronger investor turnout might have prompted the CBN to reduce rates instead of raising them.
At the auction, the CBN offered ₦650 billion worth of NTBs across the 91-day, 182-day, and 364-day maturities. The total subscription stood at ₦750.91 billion — notably lower than the previous auction’s turnout.
Investors, however, showed stronger interest in longer-term instruments. The one-year bills accounted for nearly 90% of the total subscription, with ₦674.25 billion worth of bids recorded for the 364-day paper.
The apex bank allotted ₦7.61 billion in 91-day bills at a spot rate of 15.30%, marking a 30-basis-point increase. For the 182-day tenor, ₦67.42 billion was allotted at a rate of 15.50%, up by 25 basis points.
Meanwhile, ₦316.56 billion worth of the one-year paper was allotted at a yield of 16.14%, reflecting a 37-basis-point increase from the previous rate of 15.77%.
Market analysts say the latest rate adjustment signals CBN’s effort to strike a balance between curbing inflation and sustaining investor interest amid tight financial system liquidity.
 has increased interest rates on Nigerian Treasury Bills (NTBs) across all tenors in its latest primary market auction, as overall demand weakened despite improved economic indicators.){kind=link}