The Central Bank of Nigeria is set to return to the domestic debt market on Wednesday, September 2, with a N700bn Treasury bills auction as authorities continue efforts to manage liquidity in the financial system.
The auction, being conducted on behalf of the Debt Management Office, will feature three instruments with maturities of 91 days, 182 days and 364 days. The CBN has allocated N100bn each to the 91-day and 182-day bills, while the 364-day Treasury bill will take the largest share with N500bn.
The heavy focus on the one-year instrument is likely to attract significant attention from investors, particularly as the fixed-income market continues to adjust to changing interest-rate expectations. At the previous August 26 auction, the stop rate on the 364-day bill fell by 44 basis points to 17.15 per cent, after rising to 17.59 per cent at the August 12 auction.
Money market dealers are expected to submit their bids through the CBN S4 Web Interface on September 2, with the auction results due the same day. Allotment is scheduled for September 3, while successful investors are expected to make payment by 11:00 a.m. on the allotment date.
The September auction is part of the N5.8tn Treasury bills issuance programme for the third quarter of 2026. With N2.64tn worth of bills expected to mature during the quarter, the programme could leave an estimated net borrowing requirement of N3.16tn. Investors will therefore be watching closely to see whether strong demand for high-yielding securities continues and whether the CBN maintains its aggressive approach to liquidity management ahead of the next Monetary Policy Committee meeting.
source: punch
