The Central Bank of Nigeria (CBN) has reduced interest rates on Nigerian Treasury Bills following heightened investor appetite for naira-denominated instruments at the latest primary market auction.
According to MarketForces Africa, the Debt Management Office (DMO), acting on behalf of the CBN, conducted a midweek auction of Treasury Bills totaling N400 billion across the standard tenors.
Auction results revealed a robust investor response, with total bids amounting to N1.54 trillion—significantly surpassing the offered amount. The DMO eventually allotted N714.38 billion worth of bills, with stop rates falling across all tenors, reversing the pattern observed in previous auctions.
The 91-day Treasury Bills rate declined by 50 basis points to settle at 18.00%, as disclosed in a market note by AIICO Capital Limited. Meanwhile, the 182-day tenor experienced a more substantial drop of 100 basis points to 18.50%, while the 364-day bills recorded a marginal decline of 3 basis points, closing at 19.60%.
In the first quarter of 2025, the apex bank conducted eight Treasury Bills auctions, an increase from the seven held in the final quarter of 2024. The increment was attributed to an additional auction conducted in March, bringing that month’s total to four, diverging from the typical quarterly pattern of three.
Meristem Securities Limited attributed this increased frequency to heightened government borrowing requirements and a strategy to leverage the strong investor demand and lower interest rate environment.
Throughout Q1:2025, the CBN made offers totaling N5.15 trillion across the three standard maturities, a notable increase of N800 billion from its initially indicated N4.32 trillion and a significant rise from the N2.77 trillion offered in the previous quarter.
Investor engagement surged dramatically, with total subscriptions jumping by 206.22% to N15.20 trillion, up from N4.97 trillion in Q4:2024. In total, the CBN sold N5.54 trillion worth of Treasury Bills in Q1:2025, marking a 37.88% increase from the preceding quarter and a slight 0.17% dip compared to Q1:2024.
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