The Central Bank of Nigeria (CBN) has allotted 1.491 trillion naira at its treasury bills auction on Wednesday, June 17, significantly increasing stop rates across all tenors to mop up excess system liquidity amid persistent domestic inflationary pressures.
Investors aggressively swarmed the primary market exercise, driving total subscriptions to 1.863 trillion naira against the initial one trillion naira offer size, which represents an oversubscription of 1.9 times, as public and institutional buyers positioned for higher fixed-income returns.
ALSO READ: US man gets five years in jail for abusing corpse on subway train
High premium was concentrated on the 364-day instrument, which accounted for the bulk of the transactions with an allotment of 1.291 trillion naira after its stop rate surged by 99 basis points to settle at 17.34 percent, up from 16.35 percent recorded previously.
For the shorter instruments, the apex bank allotted 129.32 billion naira for the 91-day bill at an increased stop rate of 16.28 percent, while the 182-day maturity faced undersubscription, drawing 70.17 billion naira in allotments at a revised rate of 16.50 percent.
📢 Stay Updated — Join Our WhatsApp Channel
💬 Be Part of Our WhatsApp Community
Join our WhatsApp Channel for curated updates, breaking stories, and exclusive insights from our newsroom.
📲 Join 👉 NRTC WhatsApp Channel
This dramatic upward yield adjustment aligns with the broader restrictive policy environment where the benchmark Monetary Policy Rate remains pegged at 26.50 percent, allowing the regulatory institution to maintain a calculated tiered structure between government securities and open market operations.
Market intelligence reveals that average treasury bill yields in the secondary market have consistently trended upward within the 16.50 percent to 17.89 percent range, while average sovereign bond yields also experienced a noticeable increase of seven basis points during the mid-week trading session.
ALSO READ: Nutrition 774 board adopts local funding plan to bridge ₦500bn nutrition gap
The aggressive bidding behavior comes against the backdrop of Nigeria’s headline inflation rate climbing to 15.93 percent in May, marking the second consecutive cycle where the monetary authorities have aggressively driven up primary market yields following a similar comprehensive rate hike on June 3.
By absorbing liquidity above its initial targets, the central bank aims to defend the local currency, compress the negative real return on investments, and reinforce its ongoing monetary tightening cycle designed to restore macroeconomic stability and curb severe price distortions across the country.
