CBN to Sell Treasury Bills Midweek, Rates Projected to Taper
The Central Bank of Nigeria (CBN) is set to conduct its second Treasury Bills (T-Bills) auction for the month on Wednesday with the total offer size of ₦290 billion, split across three maturities.
With disinflation, fixed income market analysts anticipate adjustment to spot rates amidst noticeable wide gap or spread between Treasury and OMO bills instruments.
Inflation rate declined to 20.12% in August, leaving real interest rate at 7.38% due to 27.5% monetary policy rate. Amidst expectation of monetary easing, the CBN will open Nigerian Treasury bills with 91 days maturity worth N30 billion for subscription on Wednesday.
The CBN will also offer investors N60 billion worth of Nigerian Treasury bills with 182 days to maturity. At the long end, the authority planned to sell N250 billion worth of 36days treasury bills to investors.
Analysts at AAG Capital Limited projected cut off rate of 15.19% to 15.39% for 91 days paper which the Apex Bank sold at 15.32% at the previous auction, down from 15.35%.
Cut off rate for 182 days bills is predicted to range between 15.30% and 15.50% – the CBN had maintained spot rate for the paper at 15.50% at the last auction.
Nigerian Treasury bills with 364-day to maturity is predicted to attract 17.19% and 17.39% cut off rate at the mid-week auction. Recall that the CBN hiked rate for its one year treasury bills to 17.69% at the last auction from 17.44%.
AAG Capital Limited told investors that the recently published headline inflation for Aug2025 at 20.12% further strengthens the call for a rate cut in Nigeria after such an extended monetary policy tightening cycle.
Analysts said the CBN’ absence in the market for the third consecutive week also compresses the OMO vs Nigerian Treasury bills spread up to 300 basis points in the same period giving credence to thoughts around rate convergence even as the 1Y NTB yield regains relevance and reasonable comparison to inflation.
“Our rates expectation give room to issuance rebalancing in favour of the 1-year Nigerian Treasury bills” #CBN to Sell Treasury Bills Midweek, Rates Projected to Taper First Holdco Drops by 5.6% on Negative Investors Sentiment
