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The Central Bank of Nigeria (CBN), on Tuesday, May 20, raised a total of N829.32 billion in its Treasury Bills Primary Market Auction, with investor demand heavily skewed toward the one-year (364-day) instrument amid sustained appetite for higher-yielding, risk-free government securities.
Auction results released on Wednesday showed that total subscriptions surged to about N1.99 trillion, significantly outstripping the N650 billion offered across the 91-day, 182-day, and 364-day maturities. The outcome reflects persistent liquidity in the financial system and strong investor preference for locking in attractive yields in a still-uncertain macroeconomic environment.
The 364-day bill dominated activity, attracting a staggering N1.84 trillion in subscriptions against an offer of N500 billion. The CBN, however, allotted N683.29 billion, underscoring its cautious approach in managing liquidity while responding to strong demand at the long end of the curve. The subscription-to-offer ratio stood at roughly 3.7 times.
In contrast, the 182-day bill recorded moderate interest, with subscriptions of N81.04 billion compared to N50 billion offered. The apex bank allotted N78.59 billion, signalling steady demand and balanced pricing at the mid-tenor segment.
The 91-day bill, however, was the weakest point in the auction. It attracted N68.63 billion in subscriptions against an offer of N100 billion, making it the only tenor that fell below its target.
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Ultimately, N67.45 billion was allotted, highlighting investor reluctance to park funds at the short end of the yield curve.
Despite the divergence in demand across maturities, stop rates remained broadly stable, indicating that market conditions were largely unchanged and the CBN maintained tight control over pricing.
The 91-day stop rate inched slightly higher to 15.95%, up marginally from the previous auction. The 182-day rate remained unchanged at 16.14%, while the 364-day bill eased slightly to 16.149% from 16.15%, reflecting near-flat movement across the curve.
Analysts note that the subdued demand for short-dated bills suggests investors are increasingly avoiding lower-duration instruments, preferring instead to lock in longer-term yields amid expectations of continued monetary tightness.
The latest auction comes just two weeks after the May 6 sale, where the CBN allotted N731.75 billion from subscriptions totaling N2.41 trillion against a N700 billion offer, further underscoring sustained strong demand for government securities despite tightening liquidity conditions.
