The Central Bank of Nigeria (CBN) scaled back its borrowing at its latest Treasury Bills auction, allotting N691.86 billion despite putting up N1.05 trillion for subscription.
At the auction held on March 18, 2026, the third this month, the apex bank declined to take the full amount on offer, even as investors submitted bids worth N3.06 trillion.
The decision shows a more cautious approach aimed at containing borrowing expenses as interest rates begin to soften.
Demand was heavily skewed toward longer-dated instruments, underlining investor preference for locking in yields.
The 364-day bill attracted the bulk of subscriptions, with investors bidding N2.89 trillion, far above the amount offered.
In contrast, demand for the 182-day tenor was weaker, with bids of N66.99 billion, well below the N150 billion on offer. The 91-day bills recorded moderate interest, with N101.29 billion allotted.
Stop rates showed early signs of easing after weeks of upward movement. The yield on the one-year bill slipped to 16.63% from 16.73% earlier in the month, while the six-month paper edged down to 16.62%. The three-month rate held steady at 15.95%.
The moderation in rates shows strong liquidity in the financial system and growing expectations that yields may have peaked. Investors appear to be moving quickly to secure current returns before any further decline.
The auction was conducted using the Dutch Auction system via the CBN’s Scripless Securities Settlement System, allowing market demand to determine pricing.
In trimming its allotment and accepting lower rates, the central bank is effectively reducing the government’s future debt servicing burden. At the same time, the strong investor turnout stresses confidence in government securities.
With demand concentrated at the long end and yields beginning to ease, the earlier surge in rates seen at the start of March is losing momentum, suggesting a possible turning point in the fixed income market.
