The Central Bank of Nigeria (CBN) is set to open Nigerian Treasury Bills (NTBs) worth N230 billion for subscription at the primary market auction on Wednesday. Acting on behalf of the monetary authority, the Debt Management Office (DMO) will issue treasury bills across the standard tenors of 91-day, 182-day, and one-year maturities.
The CBN has continued to lower spot rates as key macroeconomic indicators improve, alongside ample liquidity within the financial system. Several traders at local banks told MarketForces Africa they expect spot rates on naira assets to decline further in response to sustained disinflation.
“Spot rates across tenors could taper on Wednesday—thanks to disinflation, liquidity, and investors’ appetite for the local bills,” analysts said.
Nigeria’s real interest rate, currently at 5.6%, has remained positive since the beginning of the year, creating an environment of positive real returns for investors. However, yields on short-term government securities have recently dropped below the inflation rate.
In the secondary market last week, Nigerian Treasury Bills traded with a bearish undertone as the average yield rose due to sell-offs. Market sentiment turned mixed after system liquidity slipped into negative territory, triggering mild selling pressure across the curve.
Toward the end of the week, sentiment improved following the release of inflation data, which printed at 21.88%, sparking renewed buying interest. Nevertheless, the average benchmark yield still climbed.
Analysts noted that investors are likely to adopt a cautious approach ahead of the auction, with market focus shifting towards the new issuance. Cordros Capital Limited reported that the weekly average yield expanded by 4 basis points to 18.0% in the NTB segment, while it declined by 2 basis points to 24.6% in the OMO bills segment.
With system liquidity expected to improve this week from inflows of maturing OMO and Treasury Bills, analysts forecast a rebound in demand, which could exert downward pressure on yields.
The upcoming auction is aimed at rolling over N230 billion in maturities, and analysts anticipate a moderate reduction in stop rates.
Interesting update on the CBN’s plan to raise N230bn through Treasury Bills at the Primary Market Auction. It’s a clear move to manage liquidity and attract short-term investors. While I usually read about tech like Arabic IPTV Canada, this financial news definitely caught my attention.
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