The Central Bank of Nigeria (CBN) is set to auction ₦81 billion worth of Treasury Bills today, marking a significant drop from previous auction volumes despite continued investor demand and a tightening monetary environment.
This smaller issuance will test investor appetite in the face of shrinking liquidity in the financial system. Analysts expect the CBN may complement the T-bill sale with an Open Market Operations (OMO) auction to help absorb excess liquidity, particularly as ₦264 billion worth of OMO bills are maturing this week. If the central bank proceeds with both operations, it could withdraw up to ₦345 billion from circulation.
The anticipated auctions signal the CBN’s likely continuation of its hawkish stance, aimed at curbing inflation and stabilising the naira. Without an OMO refinancing operation, the influx of maturing funds could ease short-term interest rates, undermining efforts to tighten monetary conditions.
At its last T-bill auction, the CBN raised ₦450 billion across three tenors—₦50 billion (91-day), ₦100 billion (182-day), and ₦300 billion (364-day). Investor interest remained strong, with total bids hitting ₦1.31 trillion and a bid-to-offer ratio rising to 2.9x from 2.3x. The stop rates reflected continued upward pressure, closing at 17.98 percent for the 91-day, 18.50 percent for the 182-day, and 19.35 percent for the 364-day maturities.
Reinforcing its tightening posture, the central bank also held a ₦600 billion OMO auction last week, attracting ₦1.529 trillion in bids and allotting ₦1.512 trillion—a sign of continued investor appetite for high-yield instruments.
Today’s auction will be closely scrutinised by markets for any indication of changing investor sentiment or adjustments in the CBN’s policy direction, particularly as inflation remains high and pressure on the naira continues.
