CBN cuts interest rate on T-Bills below 18%
Agency Report
The Central Bank of Nigeria (CBN) has cut spot rates on Nigerian Treasury bills at the primary market auction on Wednesday in a bid to reduce its payment burden.
The Apex Bank has been scaling back on elevated discount rates offered on the Treasury bills paper due to strong demand and the fact that the benchmark interest rate has raced ahead of the country’s headline inflation.
At the primary market auction on Wednesday, the CBN offered N650 billion worth of bills across standard maturities to investors for subscription. Investors bid for 91-day, 182-day, and 364-day papers with preference for long tenors.
Again, the 364-day Treasury Bills saw significant oversubscription, with a total bid of N1.8 trillion from high return seeking investors, the amount that was about 4 times N500 billion offered by the CBN.
Total subscription settled at M1.92 trillion on the back of excess liquidity reported in the money market before the auction. Again, investors showed preference for 364-day paper, which accounted for 94% of total subscriptions.
The 91-day and 182-day T-bills both experienced under-subscriptions according to results, with subscription levels at 89.39% and 75.01 per cent, respectively.
The general bid-to-cover came in at 2.96x, lower than the previous auction’s 3.44x. The CBN allotted N830.44 billion, exceeding the offer size by 28%. Further breakdown revealed that 364- day Treasury bills accounted for 86 per cent of the total allotment made by the CBN.
Stop rates for the 91-day paper remained unchanged at 17.00 per cent, while the 182-day and 364-day bills declined by 25bps and 61bps, respectively, to close at 17.75 per cent and 17.82 per cent.
In the secondary market, trading activity was relatively quiet as focus shifted to the NTB primary market auction. Minimal activity was observed on the short and long ends, particularly the 22 May 2025, 5 Feb 2026, and 19 Feb 2026 papers.
Traders reported that the average yield declined at the short (-1bp), mid (-1bp), and long (-1bp) segments, driven by demand for the 78-day to maturity (-1bp), 169-day to maturity (-1bp), and 323-day to maturity (-1bp) bills, respectively.
Overall, the average yield on Nigerian Treasury bills fell to 19.78%.
Similarly, the average yield declined by 1bp to 22.5% in the OMO segment.
