The Central Bank of Nigeria, CBN, recorded bids worth N4.4 trillion for Treasury Bills worth N700 billion at its auction on Wednesday, August 12, 2026.
Despite the strong demand, the CBN raised the stop rate on the benchmark 364-day Treasury Bill to 17.59 per cent.
The decision reverses the cut made at the last auction on July 29, when the rate on the one-year bill was reduced by 31 basis points even as subscriptions were almost seven times the amount on offer.
The auction results show investors still have strong appetite for government debt, even as the CBN keeps borrowing costs high.
At Wednesday’s auction, demand was particularly strong for the 364-day Treasury Bill, with investors submitting N4.19 trillion in bids for the N500 billion offered.
The CBN raised the stop rate by 24 basis points to 17.59 per cent from 17.35 per cent at the previous auction rather than respond to the heavy demand with a lower clearing rate.
The development suggests that the apex bank is continuing to prioritise monetary tightening and the management of liquidity conditions, even as investors demonstrate strong appetite for government securities.
The 364-day instrument saw N1.26 trillion allotted to investors, significantly above the N500 billion initially advertised.
Demand for the shorter-dated instruments was comparatively weaker. The 182-day bill attracted N63.97 billion in subscriptions against N100 billion offered, with N47.48 billion eventually allotted. Its stop rate was retained at 16.50 per cent.
Besides, investors submitted N162.21 billion for the 91-day bill, against an offer of N100 billion, while N148.57 billion was allotted. The stop rate remained unchanged at 16.30 per cent.
The latest auction therefore produced a clear divergence across the three maturities, with the CBN maintaining the rates on the 91-day and 182-day instruments while increasing the rate on the benchmark one-year bill.
The securities are scheduled to mature on November 12, 2026, February 11, 2027 and August 12, 2027 for the 91-day, 182-day and 364-day bills respectively.
The sharp increase in demand for the longer-tenor bill points to continued investor interest in locking in relatively high yields on government securities.
But, the CBN’s decision to raise the clearing rate despite the substantial oversubscription indicates that demand alone is not determining the pricing of government borrowing.
The move could also have implications for fixed-income investors and the wider financial market, as higher Treasury Bill yields can influence the pricing of other short-term financial assets and the cost of funds across the economy.
Wednesday’s auction underscores the balancing act confronting the CBN as it manages liquidity, inflationary pressures and investor demand while seeking to maintain stability in the domestic financial market.