The Central Bank of Nigeria (CBN) softened its stance on Treasury Bills issuance by allotting only N691.86 billion out of the N1.05 trillion offered at its Primary Market Auction held on March 18, 2026.
This is according to the auction results seen by Nairametrics, which showed strong investor appetite despite the reduced allotment.
The development reflects a more cautious approach by the CBN in managing borrowing costs.
The auction had initially offered N1.05 trillion across the 91-day, 182-day, and 364-day tenors, but the final allotment came significantly lower even as total subscriptions surged to N3.06 trillion.
What the data is saying
Auction results indicate that demand remained heavily skewed toward the 364-day Treasury Bill, which dominated overall subscriptions. Investor appetite was strongest at the long end of the curve, while mid-tenor demand lagged significantly.
- The 364-day bill attracted N2.89 trillion in subscriptions against an offer of N800 billion, with N542.64 billion eventually allotted.
- The 91-day bill recorded N102.19 billion in subscriptions compared to N100 billion offered, with N101.29 billion allotted.
- The 182-day bill underperformed, drawing only N66.99 billion in subscriptions against an offer of N150 billion, with N47.94 billion allotted.
The results highlight a clear investor preference for longer-dated instruments, even as participation in shorter tenors remained moderate and the mid-tenor weakened further.
More insights
Total subscriptions rose sharply to N3.06 trillion, up from N2.34 trillion recorded at the March 4 auction, driven largely by increased demand for the 364-day instrument. This surge underscores growing investor confidence in locking in longer-term yields.
- The 91-day bill stop rate remained unchanged at 15.95%.
- The 182-day bill eased slightly to 16.62% from 16.65%.
- The 364-day bill declined to 16.63% from 16.73%.
The moderation in stop rates, particularly at the longer end, signals easing pressure on yields and suggests improved liquidity conditions in the financial system. It also indicates that investors are increasingly willing to accept lower yields in exchange for securing longer-term positions, possibly in anticipation of future rate cuts.
What you should know
The auction was conducted via the CBN’s Scripless Securities Settlement System (S4) and executed using the Dutch auction system to ensure transparent price discovery. This framework allows rates to be determined by competitive bidding, reflecting prevailing market conditions.
- The Dutch auction system enables efficient pricing based on demand and supply dynamics.
- The S4 platform enhances transparency and operational efficiency in the auction process.
- At the March 4 auction, stop rates had increased, particularly on the 364-day bill, which stood at 16.73%.
- A slight moderation was observed at the March 11 auction, followed by a further decline in the latest auction.
The latest outcome suggests that the upward pressure on yields seen earlier in the month may be easing, as improved liquidity and stronger demand continue to shape market expectations.
