CBN Rejects Majority of T-Bill Bids as Investors Anticipate Bullish Secondary Market Activity

Nigeria’s Treasury bills market is expected to witness increased buying interest in the secondary market after the Central Bank of Nigeria (CBN) rejected a significant portion of bids at its latest auction, while pricing the one-year bill at a stop rate of 17.66%.

Market participants expect a bullish trend in secondary market transactions following the CBN’s decision to reject 60% of total subscriptions at Wednesday’s Treasury bills auction, creating a supply gap that investors may seek to fill.

The average yield on Nigerian Treasury bills remained stable in the secondary market as investors positioned ahead of the primary market auction, where the CBN offered ₦600 billion worth of bills for subscription.

Traders told MarketForces Africa that investors are likely to return to the secondary market to secure available instruments after the auction recorded subscriptions exceeding ₦3 trillion, significantly above the amount offered by the CBN.

Following the auction, the 15 July 2027 Treasury bill was quoted at 17.45%/17.40%, according to Herwood Capital Limited. Selective buying activity was also recorded in the fixed income market on Wednesday, supported by improved liquidity conditions in the money market and a moderation in inflation despite continued pressure on the naira.

Investment firms reported that yields declined at both the short and long ends of the Treasury bills curve by one basis point each, while the mid-section of the curve expanded by two basis points.

As a result, the average market yield closed unchanged at 18.41%.

Trading activity remained subdued at the start of Wednesday’s session as investors awaited the outcome of the Treasury bills auction. However, some demand emerged in the Open Market Operations (OMO) segment, with the 17 November 2026 OMO bill trading at a 20.11% bid yield.

In the Treasury bills market, the 11 March 2027 maturity was quoted at 17.30%/17.05%.

The auction recorded strong investor demand, with total subscriptions reaching ₦3.03 trillion against the ₦600 billion offer size. The Debt Management Office (DMO) subsequently allotted ₦1.19 trillion.

The stop rates for the 91-day and 182-day Treasury bills remained unchanged at 16.30% and 16.50%, respectively. However, the CBN lowered the stop rate for the 364-day bill to 17.66% from 17.70% at the previous auction.

The latest inflation data released by the National Bureau of Statistics (NBS) showed that Nigeria’s headline inflation rate eased marginally to 15.91% year-on-year in June from 15.93% in the previous month.

The decline was mainly driven by a slowdown in core inflation, which fell from 16.82% to 15.92% during the period. Month-on-month inflation also moderated to 1.66% in June from 1.75% in May.

Market analysts expect investor demand for Treasury bills to remain strong as participants continue to assess inflation trends, liquidity conditions, and available yields in the fixed income market.