One-year bill gets N500bn allocation as investors watch for signals on interest rates and liquidity ahead of September MPC meeting…..
The Central Bank of Nigeria (CBN) is set to offer N700 billion worth of Nigerian Treasury Bills (NTBs) at its first auction for September, in a fresh move that will put the government securities market in focus ahead of the next Monetary Policy Committee meeting.
The auction, being conducted on behalf of the Debt Management Office (DMO), will cover the 91-day, 182-day and 364-day maturities, with the longest-dated instrument accounting for the bulk of the offer.
According to the Invitation to Tender for Nigerian Treasury Bills, all Money Market Dealers are required to submit their bids through the CBN S4 Web Interface between 8:00 a.m. and 11:00 a.m. on Wednesday, September 2, 2026.
The N700 billion offer is divided into N100 billion for the 91-day bill, another N100 billion for the 182-day instrument and N500 billion for the 364-day bill.
Each bid is to be submitted in multiples of N1,000, subject to a minimum bid of N50,001,000. Dealers can place multiple bids either for their own accounts or on behalf of non-Money Market Dealers and members of the public.
The CBN, however, retains the authority to reject any bid or adjust the amount offered depending on prevailing market conditions.
The result of the auction is expected to be released on Wednesday, while allotment letters are scheduled for issuance on Thursday, September 3. Successful bidders are required to make payment to the CBN no later than 11:00 a.m. on the allotment date.
The latest auction forms part of the N5.8 trillion Treasury Bills issuance programme for the third quarter of 2026, jointly managed by the DMO and the CBN.
Under the programme, the government plans to raise N900 billion through 91-day bills, N900 billion through 182-day bills and N4 trillion through 364-day instruments between July and September.
The 364-day tenor therefore accounts for about 69 percent of the entire quarterly programme, highlighting the government’s preference for longer-dated Treasury Bills in the current borrowing cycle.
At the same time, Treasury Bills valued at N2.644 trillion are scheduled to mature during the quarter. After accounting for those maturities, the programme represents estimated net new borrowing of about N3.16 trillion.
The CBN had initially scheduled major N700 billion Treasury Bills auctions for July 8, July 29, August 5, August 12, August 26 and September 2.
However, the August 5 auction was cancelled after the CBN’s back-to-back Open Market Operations (OMO) sales had already withdrawn substantial liquidity from the financial system.
The quarterly programme has also coincided with periods in which large Treasury Bill maturities temporarily injected liquidity into the banking system.
On July 22, Bills worth N378.43 billion matured without a corresponding new issuance, while another N429.23 billion matured on August 19. The maturities temporarily released funds into the financial system before the CBN returned to the market with fresh Treasury Bills and other liquidity-management operations.
Investor demand for the government securities has remained particularly strong, with recent auctions attracting bids several times above the amounts initially advertised.
At the August 12 auction, investors submitted bids worth N4.4 trillion against N700 billion offered by the CBN.
The 364-day instrument accounted for the overwhelming majority of demand, attracting N4.19 trillion in bids, while its stop rate increased by 24 basis points to 17.59 percent.
The CBN subsequently reduced the stop rate on the one-year bill by 44 basis points to 17.15 percent at the August 26 auction.
The pattern has also seen the apex bank allot significantly more than the advertised amounts.
Combined allotments at the August 12 and August 26 auctions reached N2.218 trillion, compared with the N1.4 trillion initially offered across the two auctions.
The sizeable allotments have reinforced market expectations that the CBN is using Treasury Bills not only as a funding instrument but also as part of its broader strategy for managing liquidity and financial conditions.
Rate decision could shape September auction
The latest auction is coming at a particularly important point for investors, with expectations building that the CBN could begin cutting interest rates at its September Monetary Policy Committee meeting.
Market participants will therefore be watching the September Treasury Bills auction closely for clues about the direction of monetary policy.
A further reduction in the 364-day stop rate could strengthen expectations of an impending easing cycle, while another aggressive allotment at relatively high yields could indicate that the CBN remains more focused on liquidity sterilisation and monetary control than on lowering borrowing costs.
Analysts have already raised concerns about the economic cost of maintaining elevated interest rates to attract foreign portfolio investment.
With the CBN having already allotted more than N2.2 trillion in August against a combined offer of N1.4 trillion, attention is now shifting to whether the trend will continue as the third quarter draws to a close.
Wednesday’s N700 billion auction is the first of the final two scheduled Treasury Bills sessions for September and could provide an important early signal of how the CBN intends to balance liquidity management, government financing needs and the growing expectation of lower interest rates.
The outcome will also offer investors a clearer picture of whether the aggressive allotment pattern seen in recent months is likely to persist as the authorities work towards completing the N5.8 trillion Q3 Treasury Bills programme.
