The Debt Management Office (DMO) has rejected N763bn worth of bids at Nigeria’s latest Treasury bills auction, allotting N269.06bn out of the N1.032tn submitted by investors.
The auction, conducted by the Central Bank of Nigeria (CBN) on behalf of the Federal Government on October 14, also recorded an increase in the interest rate on one-year Treasury bills for the first time since August.
The stop rate for the 364-day instrument rose to 15.90 per cent from 15.85 per cent at the previous auction held on October 7.
The government offered N450bn across the 91-day, 182-day and 364-day instruments but raised only N269.06bn, despite receiving bids worth more than twice the amount offered.
The 364-day bill attracted the highest investor demand, receiving subscriptions worth N982.21bn. However, the DMO allotted only N220bn, representing about 22.4 per cent of the bids submitted for the instrument.
Investors submitted offers at rates ranging from 15.00 per cent to 18.18 per cent, while the government settled at 15.90 per cent.
For the 182-day instrument, investors submitted N30.10bn in bids against an offer of N50bn. The DMO allotted N29.54bn at an unchanged rate of 15.80 per cent.
The 91-day bill attracted N19.91bn in subscriptions, with N19.52bn allotted at a stop rate of 15.50 per cent.
Overall, subscriptions were 2.29 times the amount offered, compared with 1.97 times at the October 7 auction. However, demand for the one-year bill fell by approximately 41.6 per cent from the N1.683tn recorded at the previous auction.
The increase in the one-year rate reverses the downward trend in Treasury bill yields that followed the CBN’s September monetary policy adjustment.
The 364-day stop rate had climbed to 17.59 per cent on August 12 before declining to 15.89 per cent on September 23 and 15.85 per cent on October 7.
On September 22, the CBN reduced its benchmark interest rate by 350 basis points to 23 per cent.
Despite the decline in subscriptions, the one-year instrument continued to attract the largest share of investor interest, indicating a preference for securing returns over a longer investment period.
The latest auction followed the CBN’s allotment of N8.14tn in Treasury bills during the third quarter of 2026, exceeding its target of N5.80tn by 40.3 per cent.
The DMO allotted N269.06bn at the latest auction, while N80.84bn worth of Treasury bills was scheduled to mature. This implies a net increase of approximately N188.22bn in outstanding face value.
A Lagos-based fixed-income analyst, Ismail Adu, said the higher stop rate offered investors a slightly improved return on newly purchased Treasury bills but could increase government borrowing costs if higher rates were applied to larger borrowing volumes.
The auction results did not specify why individual bids were rejected. However, the difference between the amount investors offered and the amount allotted indicates that the government limited its borrowing despite strong demand for the securities.
