The Central Bank of Nigeria (CBN) has reduced interest rates on two key Treasury Bills tenors, signaling a downward adjustment in yields amidst a liquidity surplus exceeding N8 trillion in the financial system.
According to auction result data, stop rates on the 182-day and 364-day instruments declined by 20 basis points to 16.42% and 16.43% respectively, while the 91-day bill remained unchanged at 15.95%.
A breakdown of the auction results shows a divergence in investor appetite across maturities, with the 364-day bill dominating overall subscriptions.
The instrument attracted N2.73 trillion in bids against a N200 billion offer, with the CBN allotting N394.88 billion.
Analysts note that institutional investors are increasingly front-loading positions in long-dated securities in anticipation of further rate moderation.
The development comes weeks after the Monetary Policy Committee reduced benchmark rates, signaling a gradual easing of monetary conditions and pointing to lower yields across Nigeria’s fixed income market.
The current rate compression reflects improved liquidity conditions across the banking system, with excess liquidity in the financial system estimated above N8 trillion pushing investors to accept lower stop rates.
