Nigeria auctions N600bn in T-bills ahead of June inflation data
The Central Bank of Nigeria is seeking N600 billion in a treasury bills auction where a trimmed long-end supply will test whether recent yield spikes hold ahead of crucial inflation data.
The Central Bank of Nigeria (CBN) will look to raise N600 billion through a treasury bills auction today, offering N100 billion each in 91-day and 182-day tenors alongside N400 billion in 364-day paper. This issuance, conducted via a Dutch auction system, is the first of three scheduled for July under a Q3 borrowing program that targets a total of N5.8 trillion across nine schedules. Notably, the apex bank reduced the 364-day tranche to N400 billion from the N500 billion offered at the prior session.
Bids from authorized money market dealers opened at 8:00 a.m. and will close at 11:00 a.m., with submissions required in multiples of N1,000 and a minimum of N50,001,000. The CBN retains the right to adjust the total volume on offer depending on prevailing market dynamics. Allotment letters are set to be issued on Thursday, with settlement payments due the following morning.
Today’s carefully calibrated supply arrives after a sharp repricing at the previous auction on July 8. The stop rate on the 364-day bill jumped 36 basis points to 17.70%, while the 91-day and 182-day tenors cleared at 16.30% and 16.50%, respectively. Despite the higher costs, primary market demand remains intense. Total subscriptions hit N2.03 trillion against a N700 billion offer, with institutional investors directing N1.86 trillion of that demand exclusively toward the one-year instrument.
For fixed-income market participants, Nigerian treasury bills remain one of the few local instruments offering a decisive premium over rising prices. With headline consumer prices increasing 15.93% in May, the 17.70% yield on the 364-day bill provides a positive real return of roughly 177 basis points. This attractive spread explains the consistent oversubscription that has characterized every primary market auction in Nigeria throughout 2026.
Market attention is now divided between the auction results and the National Bureau of Statistics, which is scheduled to release June inflation figures today. The CBN intentionally allotted just N1.06 trillion at its last auction, pulling back from the N1.49 trillion allotted in June, signaling a measured approach to its heavy borrowing schedule. Traders will be watching closely to see if the central bank allows the 364-day stop rate to push even higher, or if the latest inflation data prompts a slight easing of short-term funding costs.
