The Central Bank of Nigeria (CBN) has lowered the stop rate on its one-year Treasury Bill to 17.35%, following overwhelming investor demand that saw subscriptions rise nearly seven times the amount offered. At the July 29, 2026 primary market auction, investors flooded the 364-day Treasury Bill with bids totaling ₦3.38 trillion against an offer of ₦500 billion, highlighting growing confidence in longer-term government securities despite the decline in yields.
According to the auction results, the CBN offered a combined ₦700 billion across its three Treasury Bill tenors, including ₦100 billion each for the 91-day and 182-day instruments and ₦500 billion for the 364-day bill. Total subscriptions reached approximately ₦3.62 trillion, with the bulk of demand concentrated on the one-year instrument. Although the longer-tenor stop rate dropped by 31 basis points from 17.66% to 17.35%, investors remained eager to secure the security, prompting the apex bank to allot over ₦1.02 trillion—more than twice the amount initially offered.
Shorter-term Treasury Bills also recorded positive participation, though demand was considerably lower. The 91-day bill attracted ₦135.74 billion in subscriptions against a ₦100 billion offer, while the 182-day instrument received bids worth ₦104.74 billion. Both maturities maintained their previous stop rates of 16.30% and 16.50%, respectively, suggesting that investors continue to favor longer-term instruments where returns remain relatively attractive despite the easing in yields.
Market analysts believe the falling stop rate reflects improving liquidity within Nigeria’s financial system and a growing willingness by institutional investors to accept slightly lower returns in exchange for locking in longer-term investments. The CBN’s continued decision to allot significantly more than the advertised amount also supports the Federal Government’s financing strategy under its expanded Q3 2026 Treasury Bills programme, while helping absorb excess liquidity circulating in the banking system.
The latest auction concludes a month of exceptionally strong investor appetite for government securities, with the 364-day Treasury Bill consistently attracting multi-trillion-naira subscriptions throughout July. While the one-year instrument continues to offer an effective yield close to 21%, industry experts maintain that a gradual reduction in government borrowing rates could ease pressure on the private sector, which has long argued that high Treasury Bill yields make it more difficult for businesses to access affordable funding. As Nigeria’s monetary landscape evolves, investors will be watching closely to see whether the CBN continues its gradual moderation of borrowing costs in the months ahead.
source: nairametrics
