The Central Bank of Nigeria has lowered the yield on its 364-day Treasury Bill, as investors poured in a massive N3.38 trillion into the instrument at the primary market auction on Wednesday, July 29, 2026. This amount is nearly seven times the N500 billion on offer.
The apex bank allotted a total of about N1.25 trillion across all three tenors, according to the auction result.
The auction results show the persistent and overwhelming institutional preference for the one-year instrument, even as the stop rate on that tenor declined significantly by 31 basis points.
The CBN offered a combined N700 billion — N100 billion each for the 91-day and 182-day bills, and N500 billion for the 364-day bill — in the third and final Treasury Bills auction for July 2026.
Total subscriptions reached approximately N3.62 trillion, driven almost entirely by demand at the long end.
The 364-day bill was heavily oversubscribed by 6.76 times, with a subscription of N3.38 trillion and an allotment of N1.02 trillion, more than double the amount offered.
The stop rate for the 364-day bill was 17.35%, down 31 basis points from 17.66% at the previous auction.
Demand remained overwhelmingly concentrated on the 364-day bill, consistent with the pattern seen throughout July and earlier auctions.
The sharp drop in the 364-day stop rate reflects improved market liquidity and investors’ willingness to accept lower yields to lock in the longer tenor.
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They continue with the recent practice of significantly overshooting offer sizes at the long end, which has helped the apex bank absorb excess demand and support the government’s liquidity management and financing needs under the expanded Q3 2026 NTB programme.
In similar situations, central banks have used Treasury Bill auctions to manage liquidity and influence interest rates, with varying degrees of success.
For instance, in some cases, aggressive monetary policy easing has led to increased demand for longer-tenor instruments, while in others, it has resulted in decreased demand due to concerns about inflation and currency depreciation.
In the context of the Nigerian economy, the CBN’s actions may be seen as an attempt to balance the need for liquidity management with the need to support economic growth, much like efforts to stabilize consumer credit in the country.
Shorter tenors saw healthier participation than in some earlier July auctions, with both the 91-day and 182-day bills modestly oversubscribed and rates held steady.
Wednesday’s auction was the final Treasury Bills sale of the month and part of the CBN’s Q3 2026 programme targeting N5.8 trillion in gross issuance.
The sustained strong demand for the 364-day bill, combined with the easing in its stop rate, points to both abundant system liquidity and a gradual moderation in the government’s short-term borrowing costs at the longer end of the curve.
Returns across all tenors remain competitive, with the one-year true yield near 21% continuing to offer the most compelling lock-in opportunity for institutional investors.