CBN targets N600bn Treasury Bills sale as investors await interest rate direction

The Central Bank of Nigeria (CBN) is set to raise N600 billion through a Nigerian Treasury Bills (NTB) auction on Wednesday, as investors closely watch inflation data and interest rate movements that could shape the country’s fixed-income market.

The auction, conducted on behalf of the Debt Management Office (DMO), forms part of the apex bank’s third-quarter borrowing programme, which targets N5.8 trillion through nine Treasury Bills issuances between July and September 2026.

According to the CBN’s official tender notice, the N600 billion offer will be split into three maturities: N100 billion in 91-day bills, ₦100 billion in 182-day bills and N400 billion in 364-day bills under the Dutch auction system.

Authorized Money Market Dealers are expected to submit bids electronically between 8:00 a.m. and 11:00 a.m. on Wednesday, with successful allotments to be announced later in the day. Settlement is scheduled for Thursday, July 16.

The latest auction comes amid strong investor appetite for government securities.

During the previous Treasury Bills auction, the CBN offered N700 billion but received subscriptions worth N2.03 trillion, representing nearly three times the amount on offer. Although the apex bank eventually allotted N1.06 trillion, investor demand remained concentrated on the 364-day instrument, which attracted N1.86 trillion in bids.

Stop rates at the last auction settled at 16.30 per cent for the 91-day bill, 16.50 per cent for the 182-day bill and 17.70 per cent for the one-year bill, the highest level recorded for the tenor in recent weeks.

The CBN has, however, reduced the size of the one-year offer to N400 billion from N500 billion in the previous auction, a move analysts say could influence yields depending on the volume of demand.

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Managing Director of Financial Derivatives Company, Bismarck Rewane, said demand for Treasury Bills is expected to remain strong as institutional investors continue to seek relatively safe investment options amid economic uncertainty.

According to him, Treasury Bills currently offer attractive risk-adjusted returns compared to many alternative investment instruments, especially for pension funds, banks and asset managers.

Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf, noted that the government’s reliance on domestic borrowing reflects efforts to finance fiscal obligations without increasing exposure to foreign exchange risks.

He, however, cautioned that sustained high yields could raise borrowing costs for the government and crowd out private sector access to credit if maintained for an extended period.

Investment analysts also said today’s auction is likely to be influenced by the release of Nigeria’s June inflation figures by the National Bureau of Statistics (NBS).

They noted that if inflation moderates, the CBN could allow stop rates to ease slightly. However, if inflation remains elevated, yields on the 364-day Treasury Bill may stay above 17.70 per cent to attract investors seeking positive real returns.

With Treasury Bills consistently oversubscribed throughout 2026, market participants expect today’s auction to attract another strong turnout, reinforcing investors’ preference for government securities amid persistent inflationary pressures and uncertainty in other asset classes.