CBN to Auction N700bn Worth of Local Treasury Bills on Wed.
Through the Debt Management Office (DMO), the Central Bank of Nigeria (CBN) is set to auction its final set of Nigerian Treasury bills to investors in the primary market on Wednesday.
The authority has consecutively conducted two auction sales in December due to an ad-hoc offers totalling N750 billion the authority introduced into its fourth quarter calendar.
The final auction was adjusted to N700 billion, from N365 billion initially anticipated, reflecting increase need for short term funds by the Nigerian government.
In the secondary market, trading activities were volatile as negative sentiment persisted, despite the ample liquidity surplus in the financial system.
The week began on a calm note as the CBN’s announced N600 billion OMO auction, which ended with no allotments, and investors focused on the midweek Treasury bills auction of N750 billion.
Notably, the Nigerian Treasury bills auction eventually cleared higher with an allotment of N788.2 billion from a subscription of N1,689.2 billion, while the stop rate on the 354-day tenor increased by 45bps to 17.96%.
As the week progresses, the sentiment improves, with renewed buying interest in the 10-Dec-26 and 3-Dec-26 bills.
Due to higher liquidity level in the financial system, the CBN held another OMO bills auction with NGN600.00 billion on offer across the 180-Day and 215-Day tenors. The auction saw a robust outcome, with N1.32 trillion allotted at stop rates of 19.39% and 19.49%, respectively.
Across segments, average yield on Nigerian Treasury bills climbed by 74 bps to 17.7%, while average OMO yields decreased by 20 bps to 21.8%.
Given the anticipated but modest improvement in system liquidity, analysts expect only mild downward pressure on bill yields. However, analysts at Cordros Capital Limited do not rule out sell-offs by investors in anticipation of higher rates at next Wednesday’s auction
