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.

This latest auction will bring the federal government’s total NTB borrowing to nearly N3 trillion over the past two weeks.

Conducted on behalf of the Debt Management Office (DMO), today’s auction shows the government’s increasing reliance on local investors to fund its operations and manage growing debt obligations.

The Breakdown: What is on Offer Today?

The government is offering three types of Treasury Bills, using the Dutch Auction system where interest rates (yields) are set by investor demand.

• 91-Day Bills: N100 billion
• 182-Day Bills: N150 billion
• 364-Day Bills: N800 billion

The focus on the 364-day (one-year) bills shows both the government and investors favour longer-term commitments, especially as interest rates remain high.

N3 Trillion in Two Weeks: The Timeline

If fully subscribed, today’s auction will bring March’s total NTB borrowing to N2.99 trillion.

1. March 4: N1.01 trillion raised (Rates jumped to 16.73% for one-year bills).
2. March 11: N933.92 billion raised (Rates remained stable).
3. March 18 (Today): N1.05 trillion target.

Experts warn that this isn’t just routine business. It shows a system under pressure. Funds raised are largely to roll over maturing debt and cover the 2026 budget deficit, estimated at N20.12 trillion.

“This is not routine financing. It is a signal of pressure, a signal of urgency, a signal of a system stretched,” said Blakey Okwudili Ijezie, convener of Blakey’s National Economic Conference.

“Interest rates will rise because such volumes cannot be absorbed cheaply. When rates rise, businesses borrow less, expansion slows, and jobs are threatened,” he asserted.

What you should know

Large government borrowing usually drives up rates. While this benefits savers, it increases the cost of loans for businesses and individuals.

Banks may prefer high-yield government bills over lending to small businesses, limiting private sector growth.

Signs of Fiscal Pressure Analysts, including Olubunmi Ayokunle of Agusto & Co., note that delays in releasing capital allocations suggest limited government finances.

“If funds are mainly to roll over maturing obligations, then the net impact on total borrowing may not be as significant as it appears,” said Olubunmi Ayokunle, head of Financial Institutions Ratings at Augusto & Co.

With over 70% of its deficit now funded domestically, the federal government’s borrowing spree is a reminder that the cost of credit for Nigerians is likely to remain high for a while.

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