The Central Bank of Nigeria (CBN) has unveiled plans to float N220 billion worth of Nigerian Treasury Bills in a public auction scheduled for Wednesday. The auction will cover three standard tenors — 91, 182, and 364 days.
The modest offer size is expected to draw intense investor interest, particularly for longer-term papers, amid shifting interest rate expectations and growing liquidity in the money market.
The previous auction witnessed steep cuts in yield across all three tenors, reflecting yield normalization and a drop in inflationary pressure. At the time, the CBN offered N290 billion in total, receiving subscriptions of N675.66 billion — significantly down from over N1.33 trillion in the preceding auction.
The 91-day bills were allotted at a reduced rate of 15%, compared to 15.74% previously. The 182-day tenor was allotted at 15.50%, down from 16.20%, while 364-day papers fetched 15.88%, declining from 16.30%.
Fixed income experts suggest that the ongoing moderation in yields, especially at the short end, is likely to continue, backed by surplus liquidity and fewer available instruments.
With disinflation trends and macroeconomic stability gaining ground, analysts expect the secondary market for T-bills to remain buoyant. The upcoming auction could see further tapering of yields as demand outpaces supply once again.
The shift also poses implications for the banking sector, where lower treasury yields could weigh on short-term returns. However, this could be offset by increased lending activities and higher asset turnover in the broader financial system.
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