NT-Bills attract N3.44 trillion oversubscription at CBN auction

Nigerian Treasury Bills, also known as NT-Bills, saw a significant surge in investor interest at the Central Bank of Nigeria’s Primary Market Auction on Wednesday. The total subscriptions reached N3.44 trillion, far exceeding the amount on offer and marking the strongest demand since December 2024.

The Central Bank of Nigeria had offered a total of N1.15 trillion across three tenors: N150 billion for the 91-day bill, N200 billion for the 182-day bill, and N800 billion for the 364-day bill. However, the total allotment across all maturities stood at N1.06 trillion. The investor interest was particularly high for the 364-day instrument, with demand being approximately four times the amount offered. This underscores the continued preference for longer-dated bills with higher returns.

The last time subscriptions reached similar levels was on December 4, 2024, when demand exceeded N5 trillion amid a period of high inflation and elevated interest rates. Yields were mixed across the curve, with the 91-day bill rising to 16.50 percent and the 182-day bill’s true yield increasing to 18.17 percent from 17.99 percent at the previous auction. In contrast, the 364-day bill’s true yield eased slightly to 22.49 percent from 22.65 percent, although it remains highly attractive to investors.

The strong demand and elevated yields can be attributed to the government’s aggressive borrowing, alongside the Central Bank’s tight monetary policy stance. Nigeria’s 2026 fiscal year is projected to run a deficit of N23.85 trillion, with limited access to affordable foreign financing pushing the federal government to rely heavily on the domestic market. As a result, the first-quarter 2026 issuance calendar targets borrowing of about N7.55 trillion within three months, exerting upward pressure on yields as the government competes for investor liquidity.

The significant oversubscription of Nigerian Treasury Bills highlights the government’s reliance on domestic borrowing to finance its budget deficit. With the Central Bank’s tight monetary policy stance and limited access to foreign financing, the government is likely to continue relying on the domestic market, which may lead to further upward pressure on yields. As the Nigerian economy navigates its fiscal challenges, the demand for Treasury Bills is expected to remain strong, driven by investors seeking higher returns in a low-yield environment.