CBN Slashes T-Bill Yields as Demand Surges Sevenfold

Investors demonstrated massive demand for long-dated government debt at the Central Bank of Nigeria’s final primary market auction for July 2026.

The 364-day Treasury bill alone attracted a staggering N3.38 trillion in bids against a N500 billion offer, mirroring a ongoing trend of institutional investors heavily favoring the one-year instrument.

Across all tenors which included N100 billion each for 91-day and 182-day bills total demand surged to roughly N3.62 trillion against a combined offer of N700 billion. Capitalizing on this strong liquidity, the apex bank allotted approximately N1.25 trillion overall, significantly overshooting its target by issuing over N1.02 trillion in 364-day bills.

Despite the overwhelming volume, the stop rate on the one-year bill dropped 31 basis points to 17.35%, reflecting investors' eagerness to lock in longer-term yields even at lower rates.

Meanwhile, shorter tenors experienced healthier participation compared to earlier July auctions, with both the 91-day and 182-day bills seeing modest oversubscriptions and holding their stop rates steady at 16.30% and 16.50%, respectively. Allotment and settlement for the auction are scheduled for Thursday, July 30, 2026.

This aggressive allotment strategy allows the central bank to absorb excess market liquidity while supporting the federal government's broader financing goals under its expanded third-quarter borrowing programme.