The Central Bank of Nigeria (CBN) allotted N1.491 trillion at its Wednesday, June 17 Nigerian Treasury Bills (NTB) primary market auction, sharply hiking stop rates across all three tenors amid persistent inflationary pressures and strong investor demand for higher yields on government paper.
The auction result comes as Nigeria’s May inflation rate of 15.93% continues to weigh on fixed-income market expectations, prompting investors to demand stronger compensation for holding government securities.
Key auction figures
| Metric | Figure |
| Total offered | N1.0 trillion |
| Total subscriptions | N1.863 trillion (1.9x oversubscribed) |
| Total allotment | N1.491 trillion (49.1% above offer size) |
| Bid-to-cover ratio | 1.2x |
The CBN accepted allotments significantly above the original offer size to absorb excess liquidity in the banking system.
Stop rate hikes across all tenors
Stop rates expanded across all three instruments compared with the June 3 auction, with the 364-day bill recording the sharpest move:
| Tenor | Offer | Subscription | Allotment | Stop Rate | Change |
| 91-Day (Sept 2026) | N100bn | N129.69bn (oversubscribed) | N129.32bn | 16.28% | +23bps from 16.05% |
| 182-Day (Dec 2026) | N100bn | N70.22bn (undersubscribed) | N70.17bn | 16.50% | +31bps from 16.19% |
| 364-Day (June 2027) | N800bn | N1.663bn (2.08x oversubscribed) | N1.291tn | 17.34% | +99bps from 16.35% |
The 99-basis point hike on the 364-day bill is the largest single-tenor move across consecutive auctions this year, signaling that the market is pricing in stubborn inflation and a CBN unlikely to pivot toward rate cuts in the near term.
Investor preference for longer duration
The demand distribution underscored a clear investor preference for duration. The one-year bill accounted for approximately 89.3% of total subscriptions and 86.6% of total allotments.
- The 182-day bill was the only undersubscribed instrument, with subscriptions reaching just 70.2% of the N100 billion on offer
Investors have persistently shown a preference for either the short-term liquidity of the 91-day bill or the superior yield of the 364-day instrument.
Market context
The 364-day bill’s stop rate of 17.34% now represents the most attractive yield in the government’s direct securities market, sitting slightly below the secondary market close of approximately 17.89% as of Wednesday, June 17.
- Average T-bill yields in the secondary market have been settling in the 16.5%–17.89% range
- The average bond market yield surged 7 basis points to close at approximately 16.89%
- The CBN’s Monetary Policy Rate remains at 26.50%, maintaining a tight monetary stance
- OMO bills were stopped at 20.37% to 21.80% at the May 29 auction, preserving the tiered fixed-income architecture
The June 17 NTB auction is the second consecutive cycle in which stop rates have risen across all three tenors, marking a new high in primary market yields after a period of relative stability. The N1.491 trillion allotment—49.1% above the N1 trillion offer size—shows the CBN remains willing to absorb excess banking system liquidity at prevailing market rates as it continues its monetary tightening campaign.
Source: Nairametrics
