CBN to Auction N220 Billion in Treasury Bills Amid Rate Adjustments
The Central Bank of Nigeria (CBN) has announced a new auction for treasury bills worth N220 billion, scheduled for Wednesday.
The bills will span across the usual 91-day, 182-day, and 364-day tenors.
Market watchers anticipate significant investor interest, especially given the smaller auction size and recent yield movements that have made longer-dated papers more attractive.
At the previous auction, the CBN cut rates on all tenors, reflecting a shift in fixed-income market dynamics amid macroeconomic improvements and declining inflation. These factors, along with abundant liquidity, created room for lower funding costs.
Since the start of the year’s second half, the yield curve for treasury instruments has been undergoing a re-alignment. Short-term yields have seen the most contraction, suggesting the market expects a dovish monetary stance going forward.
Analysts foresee persistent bullish momentum in the secondary market, as excess liquidity and reduced issuance continue to push yields downward.
Previously, the CBN offered N290 billion in treasury bills, comprising N50 billion for the 91-day paper, N20 billion for 182 days, and N220 billion for the 364-day maturity.
The total bids amounted to N675.66 billion, significantly lower than the N1.33 trillion recorded at the prior auction. Despite this drop, the bid-to-offer ratio stood at 2.3x, reflecting reasonable demand, though down from 6.6x previously.
The allotment matched the offer sizes exactly, with 91-day bills allotted at 15%, a drop from 15.74%, while 182-day bills were cleared at 15.50%, down from 16.20%. The 364-day bills drew N271.79 billion at 15.88%, a reduction from the prior 16.30% rate.
