Interest Rates on Nigerian Treasury Bills Fall Across Tenors
Interest rates on Nigerian Treasury bills (NTBs) declined across standard tenors as the Debt Management Office (DMO) conducted a heavily participated primary market auction on behalf of the Central Bank on Wednesday.
The Nigerian Treasury Bills auction on 4 November 2026 saw strong investor demand, with total subscriptions reaching N2.04 trillion against an offer of N800 billion, a bid-to-cover ratio of 2.56x, Cowry Asset Limited told investors in a note.
However, the investment firm said demand was heavily concentrated at the long end of the curve, as the 364-day instrument attracted N1.99 trillion, accounting for approximately 97.5% of total subscriptions.
In contrast, the 91-day and 182-day bills recorded relatively weak demand of N25.01bn and N25.83bn, respectively, falling significantly short of their N100bn offers.
The skew toward the one-year instrument suggests investors were more inclined to lock in prevailing yields for longer periods rather than take shorter-term positions amid the prevailing interest-rate environment.
Despite the sizeable subscription, the CBN allotted N509.40 billion, below the N800 billion total offer, for a sales-to-offer ratio of 0.64x.
The 364-day bill accounted for most allotments at N461.84 billion, while sales of the 91-day and 182-day instruments stood at N22.40 billion and N25.17 billion, respectively.
Stop rates declined marginally across all three tenors to 15.40%, 15.79% and 15.80%, from 15.50%, 15.80% and 15.90% at the previous auction. Nevertheless, the corresponding true yields remained attractive at 16.02%, 17.16% and 18.80%, respectively.
The combination of strong long-tenor demand and lower stop rates indicates that investors were willing to accept slightly reduced nominal returns to secure longer-dated placements, Cowry Asset Limited said.
“Going forward, demand concentrated in the one-year segment could sustain interest in longer-dated government securities, although the relatively low allotment against the total offer suggests the authorities still have room to manage borrowing costs”, the investment firm estimated.
