CBN allots N1.06 trillion at NTB auction, raises one-year stop rate to 17.70%
By Aboki Forex —
The Central Bank of Nigeria allotted N1.06 trillion at its July 8 Treasury bills primary market auction, raising the stop rate on the one-year bill by 36 basis points to 17.70%. Total subscriptions hit N2.03 trillion against an offer of N700 billion, representing a bid-to-offer ratio of 2.9 times.
Investors chase longer tenor
The 364-day bill attracted N1.86 trillion in subscriptions, accounting for about 91% of total bids and 88% of total allotment. The CBN allotted N935.32 billion of that tenor, even though the offer was N500 billion. Bids on the one-year bill ranged from 16.55% to 20.32%, and the stop rate settled at 17.70%, up from 17.34% at the June 17 auction.
The 91-day bill was oversubscribed at N146.54 billion against a N100 billion offer. The CBN allotted N115.38 billion, with the stop rate rising marginally to 16.30% from 16.28% at the previous auction. Bids on the short tenor ranged from 15.50% to 18.00%.
Mid-tenor bill undersubscribed
The 182-day bill was the weak spot. Subscriptions came in at just N29.94 billion, or about 30% of the N100 billion on offer. The CBN allotted only N13.76 billion. The stop rate held steady at 16.50%, unchanged from June 17. Bids on the tenor ranged from 15.75% to 17.30%.
The July 8 auction is the first major sale under the CBN’s expanded Q3 2026 NTB Issuance Programme, which targets N5.8 trillion in gross issuance between July and September. That is more than four times the net target for the previous quarter.
Net withdrawal from banking system
The auction came with a net withdrawal of funds. About N269.36 billion in Treasury bills matured on July 8, made up of N94.82 billion in 91-day bills, N48.23 billion in 182-day bills, and N126.31 billion in 364-day bills. This is the third consecutive auction in which the CBN has raised the one-year stop rate, after similar increases on June 3 and June 17.
The CBN plans to offer N600 billion in bills on July 15, with no major maturities that day. On July 22, the CBN is not planning any new bill sales, but N378.43 billion in bills will mature, putting more money back into the banking system. On July 29, the CBN plans to offer N700 billion in new bills, with no major maturities expected.
Across July, the CBN plans to sell N2 trillion in Treasury bills against only N647.79 billion in bills maturing. That is the largest planned monthly net withdrawal through Treasury bills so far in 2026.
The 36 basis point jump on the 364-day bill came even though the CBN had earlier indicated it planned to keep the rate unchanged at 17.34%, based on its own July issuance indicative rate.
For Nigerian businesses and consumers, the continued rise in one-year stop rates signals the CBN’s commitment to tight monetary policy. With the Monetary Policy Rate at 26.50% and inflation at 15.93% in May, yields on government securities remain attractive for investors but mean borrowing costs for the private sector stay elevated.