CBN’s N700bn TBs’ auction puts investor appetite to test

The Central Bank of Nigeria (CBN), on behalf of the Debt Management Office (DMO), conducted its second Treasury Bills (TBs) auction for August 2026, offering N700 billion across three maturities: N100 billion in 91-day Treasury Bills, N100 billion in 182-day bills, and N500 billion in 364-day instruments. The auction, held on Wednesday, August 26, used the Dutch auction system, with authorised Money Market Dealers submitting bids through the CBN S4 Web Interface. This follows exceptionally strong demand for government securities, as seen at the August 12 auction where investors submitted N4.41 trillion in bids against an advertised N700 billion, with the 364-day bill alone attracting N4.19 trillion. Despite this demand, the CBN raised the stop rate on the 364-day bill by 24 basis points to 17.59% from 17.35%, while rates for the 91-day and 182-day bills remained at 16.30% and 16.50% respectively. Market analysts had anticipated relatively high yields, particularly for longer-dated instruments. Research by Meristem projected a 76-basis-point increase in average secondary-market T-Bill yields to 18.89% as of August 24, from 18.13% on August 12. While strong liquidity and sustained demand could limit further upward repricing, guidance placed indicative ranges at 15.80–16.40% for the 91-day bill, 15.90–16.60% for the 182-day bill, and 16.70–17.50% for the 364-day bill.