The Central Bank of Nigeria has increased the spot rate on Nigerian Treasury bills by 146 basis points following tight subscription levels at Wednesday’s primary market auction. The one-year Treasury bill yield has now risen to 17.50%, moving 145 basis points above the country’s 16.05% inflation rate. The rate adjustment follows the decision to retain the monetary policy rate at 27%, signalling continued tightening measures as authorities work to stabilise the naira and attract capital into fixed-income assets.
At the auction, the Bank offered N700 billion across 91, 182 and 364-day maturities. Total bids reached about N775 billion, reflecting growing investor preference for naira instruments despite easing inflation. Interest was strongest in the long-term paper, where investors channelled roughly ninety per cent of total subscriptions into the 364-day Treasury bill. On the short end, the 91-day tenor received N44.17 billion against N100 billion offered, leading to an allotment of N42.80 billion at 15.30%, unchanged from previous sales. The 182-day instrument saw demand settle at N33.38 billion compared to N150 billion offered, with N30.36 billion allotted at 15.50%, also unchanged. The one-year paper remained the market focus where N697.29 billion was submitted for the N450 billion available, and the Bank allotted N636.46 billion at the new spot rate of 17.50%, up from 16.04% at the last auction.
For small businesses and MSMEs, the development could signal tougher borrowing conditions as interest rates climb, possibly tightening access to credit in the short term. However, higher yields may also attract more liquidity into government securities, potentially reducing pressure on the exchange rate. For enterprises with temporary cash reserves, Treasury bills now present a more attractive short-term investment window, particularly for firms seeking secure returns while hedging against inflation.
As yields rise and investor participation deepens, analysts will be watching how the new interest environment shapes loan pricing, investment flows, and business capital decisions heading into the next quarter.
