CBN cuts one-year T-bill yield after N3.62tn bids

The Central Bank of Nigeria (CBN) has reduced the stop rate on its one-year treasury bill at a primary market auction, a move that reflects a sustained appetite for longer-dated government securities among investors. The auction saw total subscriptions reach approximately N3.62tn, significantly exceeding the N700bn offered across the three maturities.

The strongest demand was observed for the 364-day bill, which attracted bids worth N3.38tn against an offer size of N500bn, indicating an oversubscription of nearly seven times. Despite this robust demand, the CBN allotted about N1.25tn across the 91-day, 182-day, and 364-day instruments. Notably, more than N1.02tn was allocated to the one-year paper alone, surpassing the initial offer.

The stop rate for the 364-day bill decreased to 17.35 percent from 17.66 percent at the previous auction, a drop of 31 basis points. Bid rates for this tenor ranged from 16.98 percent to 20.00 percent, demonstrating investors' willingness to accept lower yields for the security of long-term returns. This trend aligns with institutional investors' heavy concentration on the one-year instrument throughout July, as seen in previous auctions.

Analysts suggest that the decline in the one-year stop rate indicates improved liquidity within the financial system. This allows investors to accept lower returns while the CBN continues to issue larger volumes to absorb excess funds and meet government financing needs. Wednesday's sale was the final T-bill auction for July, forming part of the CBN’s N5.8tn gross issuance program for the third quarter of 2026.