On July 27, 2022, the Central Bank of Nigeria (CBN) conducted a Nigerian Treasury Bills (NTBs) auction for a 364-day tenor, aiming to raise N258.5 billion.
The auction recorded a 22.7% oversubscription, with total subscriptions reaching N317.25 billion against the offered N258.53 billion. The CBN allotted N261.33 billion at a stop rate of 7%, up from 6.07% in the previous month’s auction.
Auction Details and Market Trends
Despite the increased interest rate, the 364-day NTBs yielded a negative real return of 11.6%, driven by Nigeria’s inflation rate, which surged to 18.6% in June 2022.
The uptick in NTB rates aligns with the CBN’s hawkish monetary policy, which included raising the benchmark interest rate to 14%—the second hike in 2022—to combat soaring inflation fueled by global price pressures.
In contrast, the 91-day and 182-day NTBs faced undersubscription. The 91-day bills saw subscriptions of N1.86 billion against a N2.22 billion target, reflecting a 16.1% shortfall, with a stop rate of 2.8%.
Similarly, the 182-day bills recorded subscriptions of N1.4 billion compared to the N3.54 billion offered, a 60.3% undersubscription, also at a 2.8% stop rate. This indicates stronger investor preference for longer-term instruments offering higher yields.
Comparison with June 2022 Auction
In the previous auction on June 15, 2022, the CBN’s 364-day tenor NTBs, targeting N27.86 billion, saw an extraordinary 527% oversubscription with subscriptions totaling N175.05 billion.
Across all three tranches (91-day, 182-day, and 364-day), the CBN recorded N178 billion in subscriptions against a N34.8 billion offer, a 511% subscription rate, with a final allotment of N34.7 billion. The 91-day bills had a 27% subscription rate, while the 182-day bills were undersubscribed at 54%.
Despite the high demand, the 364-day bills posted a negative real yield of 11.63% due to inflationary pressures.
Investor Behavior and Market Insights
The sustained interest in the 364-day tenor reflects investors’ preference for longer-term, higher-yielding fixed-income securities amid volatility in variable investment markets.
The strong participation in NTBs underscores confidence in Nigeria’s fixed-income market, even as inflationary pressures erode real returns.
The CBN’s efforts to tighten monetary policy aim to stabilize the economy as global and domestic price increases continue to challenge financial markets.
Related Developments
Recent reports highlight other financial sector activities in Nigeria. On July 25, 2025, TAJBank partnered with AIFC to boost Nigeria’s foreign exchange earnings and trade with Asia, while also resolving a N957 million system glitch issue.
Additionally, on July 22, 2025, the CBN Governor settled a legal dispute with a consultant, as confirmed by a Supreme Court judgment.
