The Central Bank of Nigeria (CBN) raised a total of ₦8.99 trillion through Treasury Bills (T-Bills) auctions in the first seven months of 2025, amid sustained investor appetite for naira-denominated assets and a hedge against persistent double-digit inflation. The amount represents a 4.1% decline compared to ₦9.39 trillion recorded in the same period of 2024, according to CBN data on government securities.
Treasury Bills remain one of the safest and most liquid short-term investments for both institutional and retail investors, primarily used to finance government expenditure. The CBN disclosed that it offered ₦7.17 trillion worth of T-Bills in seven months, an increase of nearly 60% from ₦4.48 trillion in 2024, while total subscription reached ₦24.68 trillion, indicating strong market demand. However, ₦15.68 trillion in bids were rejected, as the apex bank exceeded its funding target for the period.
Interest rates on T-Bills witnessed a sharp decline during the review period. The 91-day tenor dropped to 15% in July 2025 from 18% in January, while the 182-day bill fell to 15.50% from 18.50%, and the 364-day bill closed at 15.88% compared to 22.62% at the start of the year. Analysts attribute the rate cuts to robust liquidity and strong investor demand, as well as the CBN’s efforts to reduce its payment burden and align with falling inflation.
The CBN’s monetary tightening stance remains evident, with the Monetary Policy Rate (MPR) hiked by 870 basis points to 27.50% in 2025 to curb inflation and stabilize the exchange rate. These measures have contributed to a decline in Nigeria’s headline inflation to 21.88% in July, marking the fourth consecutive month of moderation from 24.23% in March. Analysts forecast further stability in interest rates, predicting T-Bill yields to average 18% by year-end, driven by slower government borrowing and a continued disinflationary trend.
Market experts believe the rate adjustment strategy aims to attract foreign inflows, enhance FX liquidity, and ease pressure on the naira, while reducing the cost of government borrowing. “This is the most appropriate decision for the economy at this time,” one analyst noted, adding that lower yields could also influence equity market performance. With investor demand remaining strong across all maturities, the T-Bills market continues to reflect a healthy trading environment and strategic positioning by investors amid evolving macroeconomic dynamics.
Source: This day