The Central Bank of Nigeria (CBN) recorded its strongest Treasury Bills subscription in over one year as investors bid N3.44 trillion at Wednesday’s primary market auction, far exceeding the N1.15 trillion on offer.
The surge in demand, the highest since December 2024, reflects investors’ appetite to lock in high returns amid rising interest rates and aggressive government borrowing.
At the auction, the CBN offered N150 billion for the 91-day tenor, N200 billion for the 182-day, and N800 billion for the 364-day bills. Total subscriptions reached N3.44 trillion, with the 364-day instrument attracting the bulk of demand at nearly four times its offer size.
Despite the strong interest, the apex bank sold N1.06 trillion across the three maturities.
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Market participation has remained elevated since December 2025, with subscriptions consistently trending above N1 trillion at primary auctions. Analysts attribute the momentum to investors seeking to benefit from rising yields.
Yields edged higher on short-term bills, while the one-year tenor softened slightly but remained elevated. The 91-day yield rose to 16.50 per cent, while the 182-day yield climbed to 18.17 per cent from 17.99 per cent at the previous auction. The 364-day yield eased to 22.49 per cent from 22.65 per cent.
Analysts said the current yield environment is driven by a combination of heavy government borrowing and the Central Bank’s tight monetary policy.
Nigeria’s 2026 budget projects a deficit of N23.85 trillion, with the Federal Government relying largely on domestic borrowing to bridge the gap as foreign capital remains expensive. The Q1 2026 issuance calendar targets N7.55 trillion in borrowing in the first quarter alone, increasing supply pressure in the market.
Beyond fiscal needs, the CBN is deliberately keeping rates elevated to curb inflation, mop up excess liquidity and support the naira by attracting foreign portfolio inflows.
Meristem Securities said investor participation will remain strong as long as rates stay attractive. CardinalStone projected one-year Treasury Bill yields in the range of 18 to 20 per cent in the first quarter.
Optimus by Afrinvest said longer-dated bills continue to offer the best value for investors seeking to lock in high returns.
Rising yields are also expected to boost activity in the secondary market, where retail investors can access Treasury Bills through banks and digital investment platforms.
— BusinessDay
