Strong investor demand for Nigerian Treasury bills drove yields lower at the Central Bank of Nigeria’s (CBN) latest primary market auction, with the one-year bill rate dropping to 17.15 per cent despite the apex bank offering a larger volume of securities.
The CBN offered a total of N700 billion across the 91-day, 182-day and 364-day tenors during the auction, but demand significantly outpaced supply as investors submitted bids worth about N1.5 trillion. The heavy oversubscription prompted the bank to reduce stop rates on the longer-dated instruments.
The 364-day Treasury bill recorded the strongest interest from investors, attracting the bulk of subscriptions and accounting for the sharp decline in yield from 17.99 per cent at the previous auction to 17.15 per cent. Analysts said the outcome reflects investors’ growing confidence in fixed-income assets amid expectations that interest rates may ease further in the coming months.
Similarly, the stop rate on the 182-day bill fell to 16.85 per cent from 17.50 per cent, while the 91-day instrument was allotted at 16.50 per cent, unchanged from the previous auction.
Market analysts attributed the strong demand to abundant liquidity in the financial system following recent inflows from maturing government securities and other market operations. They noted that investors are locking in yields ahead of possible monetary policy adjustments that could push rates lower.
The auction result comes as Nigeria’s fixed-income market continues to witness robust participation from banks, asset managers and other institutional investors seeking relatively safe investment options with attractive returns.
