CBN CUTS T-BILL RATE AS INVESTORS SUBMIT N3.63TN IN BIDS

The Central Bank of Nigeria has reduced the stop rate on its 364-day Treasury bill to 17.15 per cent, even as investors submitted a record ₦3.63tn in bids for the one-year government security.

The strong demand came at the CBN’s latest primary market auction, where investors showed a clear preference for longer-term government securities.

The 364-day Treasury bill attracted about 95.9 per cent of the total ₦3.79tn bids received across the three maturities offered at the auction.

The CBN had offered ₦700bn across the 91-day, 182-day and 364-day instruments, including ₦500bn for the one-year bill.

Despite the overwhelming demand, the regulator reduced the stop rate on the 364-day instrument by 44 basis points from 17.59 per cent recorded at the previous auction.

The CBN ultimately allotted ₦638.19bn of the one-year bill, exceeding the initial offer by ₦138.19bn.

Only about 17.6 per cent of bids submitted for the 364-day instrument were accepted, indicating that the regulator was able to reject higher-priced bids while still attracting substantial funding.

Demand for shorter-tenor instruments was significantly weaker. The 91-day bill attracted ₦103.32bn in subscriptions against ₦100bn offered, while the 182-day bill received only ₦52.93bn against an offer of ₦100bn.

The stop rates for the 91-day and 182-day bills remained unchanged at 16.30 per cent and 16.50 per cent respectively.

Financial analysts said the concentration of demand in the one-year instrument suggests that investors are seeking to lock in relatively attractive returns over a longer period rather than repeatedly rolling over short-term securities.

Analysts also said the strong demand could allow the CBN to continue borrowing at lower rates if investor appetite for longer-dated government securities remains strong.

The latest auction highlights the growing preference for longer-term fixed-income assets as investors assess expectations around inflation, liquidity and future interest-rate movements in Nigeria.

The development could also support a gradual reduction in government borrowing costs if the trend of strong demand and lower yields continues.