CBN CUTS ONE-YEAR T-BILL RATE AS N3.62TN BIDS OVERSHADOW N700BN OFFER
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By Aishat Momoh. O.
The Central Bank of Nigeria (CBN) reduced the stop rate on its one-year Treasury bill at Wednesday’s primary market auction after receiving overwhelming investor demand, signalling sustained appetite for longer-dated government securities.
Auction results showed that investors submitted bids worth about N3.62 trillion against the N700 billion offered across the 91-day, 182-day and 364-day maturities.
The strongest demand came for the 364-day Treasury bill, which attracted N3.38 trillion in subscriptions for an offer size of N500 billion, representing an oversubscription of nearly seven times.
Despite the initial offer, the apex bank allotted about N1.25 trillion across the three tenors, with more than N1.02 trillion allocated to the one-year instrument alone.
The stop rate on the 364-day bill declined to 17.35 per cent, down from 17.66 per cent at the previous auction, a drop of 31 basis points. Bid rates for the tenor ranged between 16.98 per cent and 20.00 per cent, indicating investors’ willingness to accept lower yields in exchange for longer-term returns.
For the 91-day Treasury bill maturing on October 29, 2026, the CBN offered N100 billion, received subscriptions worth N135.74 billion, and allotted N130.72 billion. The stop rate remained unchanged at 16.30 per cent, while bid rates ranged from 15.97 per cent to 17.50 per cent.
Similarly, the 182-day bill due on January 28, 2027, recorded subscriptions of N104.74 billion against an offer of N100 billion. The apex bank allotted N99.18 billion, maintaining the stop rate at 16.50 per cent, despite bid rates ranging between 16.00 per cent and 25.00 per cent.
The latest auction continues a trend observed throughout July, with institutional investors concentrating heavily on the one-year instrument. The 364-day bill attracted N2.87 trillion in bids at the July 15 auction and N1.86 trillion at the July 8 sale, underscoring persistent demand for longer-term government securities.
Analysts said the decline in the one-year stop rate reflects improved liquidity within the financial system, enabling investors to accept lower returns while the CBN continues to issue larger volumes of Treasury bills to mop up excess liquidity and support the Federal Government’s financing needs under its expanded third-quarter issuance programme.
Wednesday’s auction was the final Treasury bill sale for July and forms part of the CBN’s N5.8 trillion gross Treasury bill issuance programme for the third quarter of 2026.
Although yields remain attractive across all maturities, the one-year Treasury bill continues to offer the highest return, with its effective yield remaining close to 21 per cent, reinforcing its position as the preferred investment option for institutional investors.
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