CBN Raises N1.457 Trillion at June Treasury Bills Auction at Higher Rates

The Central Bank of Nigeria raised N1.457 trillion at its Nigerian Treasury Bills auction held on June 3, overshooting the N1 trillion offered as investors flooded the primary market with rising stop rates across all tenors.

The auction recorded total subscriptions of N2.160 trillion, representing a 2.16 times oversubscription rate, reflecting sustained demand for naira-denominated risk-free assets despite the elevated interest rate environment.

According to data from the CBN, the 364-day tenor dominated investor appetite, drawing subscriptions worth N1.946 trillion, nearly double the amount offered. This maturity continues to be the preferred instrument for institutional investors seeking to lock in yields in the current tightening cycle.

Rising Stop Rates Reflect Tight Monetary Policy

Stop rates rose across all three tenors at the auction. The 91-day paper cleared at 16.05 per cent, the 182-day instrument at 16.19 per cent, and the benchmark 364-day bill at 16.35 per cent. The increases reflect the CBN’s continued monetary policy tightening stance as the bank battles persistent inflation.

The marginal uptick in stop rates suggests the CBN is allowing market forces to determine clearing rates rather than capping them, a departure from the practice during the Godwin Emefiele era when the bank actively managed yields downward.

Analysts at Nairametrics noted that the oversubscription was driven largely by demand from pension funds, money market funds, and banks looking to deploy excess liquidity. With the Monetary Policy Rate currently at elevated levels, Treasury Bills remain attractive relative to other investment options.

N7.77 Trillion in OMO Maturities Coming Due

Market participants are closely watching the substantial OMO (Open Market Operation) maturities expected in June, totalling N7.77 trillion. These maturities are set to inject significant liquidity into the banking system, which could fuel further demand at subsequent NTB auctions or put downward pressure on money market rates.

The large maturity profile has raised expectations that the CBN may conduct fresh OMO auctions to mop up excess liquidity and prevent it from fuelling inflation or putting pressure on the foreign exchange market. The central bank has used OMO auctions aggressively in recent months as a liquidity management tool.

For investors, the current NTB auction cycle offers an opportunity to lock in attractive real returns, though analysts caution that yields may moderate in the second half of the year if inflation begins to ease and the CBN starts to pivot toward an easing cycle.

The CBN has maintained a hawkish monetary policy posture through 2025 and 2026, prioritising inflation control over growth stimulation as headline inflation has proven stubbornly sticky above the bank’s target range.

Sources: Nairametrics, Blueprint Newspapers, 21st Century Chronicle, DMarket Forces