The Central Bank of Nigeria has lowered the stop rate on the one-year Nigerian treasury bill to 16.84 per cent, extending the recent decline in yields despite another wave of strong demand from investors.
At Wednesday’s primary market auction, investors submitted N3.35tn worth of bids for T-bills valued at N700bn, representing demand nearly five times the amount initially offered. The CBN ultimately allotted N865.71bn.
The latest reduction takes the 364-day bill’s stop rate 31 basis points below the 17.15 per cent recorded at the previous auction on 26 August.
It also means the rate has declined by 75 basis points across the last two auctions, from 17.59 per cent on 12 August to 16.84 per cent.
The investor interest remained at the long end of the market.
The 364-day instrument attracted N3.238tn in subscriptions for N500bn on offer. The CBN allotted N762.17bn, exceeding the advertised amount by N262.17bn.
By contrast, demand for shorter maturities was considerably weaker. The 91-day bill received N76.82bn in bids against N100bn offered, with N76.28bn allotted at an unchanged stop rate of 16.30 per cent.
The 182-day bill attracted only N33.51bn against N100bn on offer, while N27.27bn was allotted at 16.50 per cent.
The bills will mature on 3 December, 2026, 4 March, 2027 and 2 September, 2027, respectively.
The latest auction reinforces a pattern that has dominated the T-bills market in recent months, with investors showing a strong preference for the 364-day instrument while demand for shorter tenors remains subdued.
The one-year rate has now moved substantially below the levels recorded in July and August. It had risen from 16.35 per cent on 3 June to 17.34 per cent on 17 June and 17.70 per cent on 8 July before reaching 17.59 per cent on 12 August.
The subsequent reversal suggests that the CBN is becoming more willing to accept lower borrowing costs as demand for government securities remains strong.
Wednesday’s 16.84 per cent stop rate was only marginally above the prevailing secondary market yield of 16.74 per cent.
The development could also strengthen expectations of a broader easing in monetary conditions, particularly ahead of the CBN’s September Monetary Policy Committee meeting.