In a move reflecting its strategic monetary stance, the Central Bank of Nigeria (CBN) has reduced yield rates across all tenors of Nigerian Treasury bills following a significantly oversubscribed auction. The apex bank had offered a total of ₦162.02 billion across the 91-day, 182-day, and 364-day tenors during its latest primary market auction, but investor appetite far exceeded expectations.
According to auction data released midweek, total subscriptions skyrocketed to ₦1.233 trillion, more than seven times the offer. Most of the demand targeted long-term instruments, underscoring investors’ preference for higher-yielding assets.
For the 91-day paper, the CBN had initially put forward ₦22.02 billion worth of instruments. However, bids came in at a whopping ₦72.63 billion, prompting the central bank to allot ₦37.98 billion for that tenor.
Meanwhile, ₦40 billion worth of 182-day treasury bills was floated, with total subscriptions coming in at ₦63.56 billion. Allotments were subsequently made to the tune of ₦40.54 billion, indicating strong demand across medium-term securities.
The largest interest was recorded in the 364-day bills, where demand surged to unprecedented levels. Against a planned offer of ₦100 billion, investors placed bids totaling ₦1.097 trillion — more than tenfold the initial offer. Despite the surge, the CBN stuck to its original issuance plan, maintaining fiscal discipline.
In total, the apex bank received bids amounting to ₦1.23 trillion for an issuance of ₦162.02 billion. This aggressive interest allowed the central bank to cut its stop rates across all categories, thereby reducing government borrowing costs.
The stop rate for the 91-day bills dropped by 18 basis points to 17.80%. Similarly, yields for the 182-day tenor fell by 15 basis points to 18.35%. For the longest tenor — the 364-day bill — the stop rate was trimmed to 18.84%, down from the previous 19.35%.
This latest auction indicates a strategic shift by the CBN to take advantage of robust market liquidity while managing the cost of public debt. The aggressive rate cuts suggest a push to stabilize fiscal expenditure amid broader economic reforms.
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