CBN Cuts 1-Year Treasury Bill Yield to 16.84%

On September 4, the Central Bank of Nigeria (CBN) lowered the stop rate on the benchmark 364-day Treasury bill to 16.84% during its latest primary market auction. Despite strong investor interest, with bids amounting to N3.35 trillion for N700 billion available, the CBN allotted N865.71 billion across three tenors, surpassing the advertised amount by N165.71 billion.

The highest demand was for the 364-day bill, where investors submitted N3.238 trillion for the N500 billion offered, leading to an allotment of N762.17 billion, which was N262.17 billion above the initial offer. In contrast, demand for shorter-dated securities was weaker, with the 91-day bill attracting N76.82 billion against N100 billion offered, and the 182-day instrument receiving N33.51 billion in bids.

The auction reflects a continued decline in Treasury bill yields, with the 364-day stop rate dropping from 17.59% on August 12 to 16.84% at the recent auction, indicating the CBN's willingness to accept lower yields despite strong demand for government securities.