The Nigerian Treasury Bills (T-Bills) auction held midweek demonstrated a strong demand for longer-term bills, as the Debt Management Office (DMO) offered N530 billion worth of securities across three maturities.
The auction was conducted on behalf of the Central Bank of Nigeria (CBN), offering N50 billion for 91-day bills, N80 billion for 182-day bills, and N400 billion for 364-day bills.
Investor demand soared, particularly for the 364-day T-bills, which received a staggering N2.49 trillion in subscriptions—far exceeding the offer and accounting for 98% of the total bids. The overall subscription totaled N2.54 trillion, reflecting a bid-to-cover ratio of 4.78x, significantly higher than the previous auction’s 2.95x. The DMO allotted N756.01 billion, with 94% going to the 364-day bill.
The stop rate for the 364-day instrument dropped to 21.80%, a decline from over 22% in the previous auction. Meanwhile, rates for the shorter-term 91-day and 182-day bills remained unchanged for the seventh consecutive auction.
- Advertisement -
Tunde Amolegbe, Managing Director of Arthur Steven Asset Management, attributed the high demand for longer-dated instruments to the current high-interest-rate environment.
“Investors prefer locking in funds for a longer period to mitigate reinvestment risks associated with shorter tenors,” he explained. He also noted that the lower stop rate for the 364-day bill could signal a potential interest rate cut by the CBN’s Monetary Policy Committee (MPC), as inflation growth has moderated and the foreign exchange market has stabilized.
In the secondary market, yields on T-bills have continued to decline, reflecting growing investor demand. On Tuesday, average yields dropped by two basis points to 24.83%, with notable demand for bills maturing on March 6.
Treasury Bills—a government-backed, secure investment opportunity in Nigeria are a smart way to grow savings, offering both safety and competitive returns for both beginners and experienced investors.
With the CBN’s auctions seeing record-high subscriptions, T-bills remain an enduring appeal as a secure, government-backed investment.
