Investors submitted ₦3.63 trillion in bids for Nigeria’s 364-day Treasury bill at the Central Bank of Nigeria’s latest primary market auction, signalling strong demand for government securities despite a lower stop rate.

The CBN auction on Wednesday attracted ₦3.63 trillion in bids for the one-year instrument, representing 95.9% of the ₦3.79 trillion total bids received across the three maturities, according to the auction results reported by Punch.

The central bank cut the stop rate on the 364-day bill to 17.15% from 17.59% at the previous auction, a reduction of 44 basis points.

Punch’s report said the strong subscription showed investors were increasingly favouring longer-dated government securities, even as yields moderated.

The demand is significant for Nigeria’s fixed-income market because Treasury bill yields influence investment decisions by banks, pension funds, asset managers and other institutional investors.

Strong demand at lower yields could also provide room for the Federal Government to borrow at cheaper rates if the trend persists in subsequent auctions.

For investors, however, declining yields could put pressure on returns from short-term government securities and encourage a search for alternative assets.

The latest auction therefore provides another indication of how investors are responding to changing monetary and liquidity conditions in Nigeria’s financial market.

The CBN has continued to use open-market operations and other monetary tools as it manages liquidity and seeks to maintain stability in the financial system.