The Central Bank of Nigeria (CBN) allotted N1.49 trillion at its Wednesday June 17 Treasury bills primary market auction, hiking stop rates sharply across all three tenors.
The auction result seen by Nairametrics comes as Nigeria’s latest inflation rate of 15.93% in May continues to weigh on fixed-income market expectations, reinforcing investor demand for higher compensation on government paper.
Pricing in the rise in inflation and expectations of sustained elevated interest rates, investors piled into the one-year instrument at yields not seen in recent auction cycles.
Total subscriptions reached N1.863 trillion against an offer size of N1 trillion, translating to a bid-to-offer ratio of 1.9x, with the CBN allotting significantly above the original offer size to absorb excess system liquidity.
What the data is saying
Stop rates expanded across all three instruments compared with the June 3 auction, with the sharpest move recorded on the 364-day bill. Highlights of the June 17 auction:
- Total offered: N1.0 trillion
- Total subscriptions: N1.863 trillion (1.9x oversubscribed)
- Total allotment: N1.491 trillion (bid-to-cover ratio: 1.2x)
- 91-Day Bill (Maturity: September 2026)
- Offer: N100 billion
- Subscription: N129.69 billion (oversubscribed)
- Allotment: N129.32 billion
- Stop rate: 16.28%, up 23 basis points from 16.05%
- Secondary market last close: 16.30%
- 182-Day Bill (Maturity: December 2026)
- Offer: N100 billion
- Subscription: N70.22 billion (undersubscribed)
- Allotment: N70.17 billion
- Stop rate: 16.50%, up 31 basis points from 16.19%
- Secondary market last close: 16.17%
364-Day Bill (Maturity: June 2027)
- Offer: N800 billion
- Subscription: N1.663 trillion (2.08x oversubscribed)
- Allotment: N1.291 trillion
- Stop rate: 17.34%, up 99 basis points from 16.35%
- Secondary market last close: approximately 16.41%
More insights:
The scale and distribution of demand at the June 17 auction underscore a clear investor preference for duration, with the one-year bill accounting for approximately 89.3% of total subscriptions and 86.6% of total allotments.
- The 99-basis points rate hike for the 364-day bill is the largest single-tenor move across consecutive auctions this year, suggesting consistent with a market pricing in stubborn inflation and a CBN unlikely to pivot toward rate cuts in the near term.
Nigeria’s latest inflation data has reinforced investors push for higher returns.
With consumer prices remaining elevated, returns on fixed income instruments remain compressed, pushing investors to bid aggressively at the longer end where nominal yields are more attractive.
- The 182-day bill was the only undersubscribed instrument, with subscriptions reaching just N70.22 billion or 70.2% of the N100 billion on offer.
Across recent auctions, investors have persistently shown preference for either the short-term liquidity of the 91-day bill or the superior yield of the 364-day instrument.
- Despite the 91-day bill being oversubscribed, its stop rate of 16.28% remains broadly in line with the secondary market close of 16.30%, suggesting the primary auction priced efficiently at the short end.
The CBN continues to maintain a structural spread between NTB rates and OMO instrument rates, with OMO bills stopped at 20.37% to 21.80% at the May 29 auction — preserving the tiered fixed-income architecture that has characterised the Nigerian market throughout 2026.
What you should know:
The June 17 NTB auction is the second consecutive cycle in which stop rates have risen across all three tenors, a new high in primary market yields after a period of relative stability. At the June 3 auctions, the monetary authorities also hiked rates across all three maturities.
- The 364-day bill’s stop rate of 17.34% now represents the most attractive yield in the government’s direct securities market, sitting slightly below the secondary market close of approximately 17.89% as of Wednesday, June 17.
- The N1.491 trillion allotment, 49.1% above the N1 trillion offer size, shows that the CBN remains willing to absorb excess banking system liquidity at prevailing market rates.
- The broader fixed income yields have been trending upwards. The average T-bill yields in the secondary market have been settling in the 16.5% –17.89% range.
Similarly, the average bond market yield surged 7 basis points to close at approximately 16.89% as of Wednesday, June 17.
The CBN’s Monetary Policy Rate remains at 26.50%, maintaining widespread above Bonds and NTB rates that continue to reflect the apex bank’s tight monetary stance.
