Nigeria Sets N700bn T-Bill Auction Amid Record Q3 Issuance Push
Nigeria's central bank will auction N700 billion in Treasury bills this week, capping a month of overwhelming demand for long-dated debt that highlights a broader N5.8 trillion quarterly liquidity mop-up.
The Central Bank of Nigeria will conduct its third and final primary market Treasury bills auction for July on Wednesday, offering N700 billion across 91-day, 182-day, and 364-day tenors. The debt office is allocating N100 billion to the two shorter tenors and N500 billion to the one-year paper, continuing its preference for longer-dated instruments.
This sale is a small component of the central bank's Q3 2026 issuance programme, which targets N5.8 trillion in gross issuance between July and September. That figure is more than four times the net target of the previous quarter, signaling an aggressive strategy to absorb excess naira liquidity from the financial system.
Institutional investors have aggressively pursued the long end of the curve throughout July. At the July 8 auction, the one-year bill drew N1.86 trillion in bids against a N700 billion total offer, pushing the stop rate up to 17.70%. Two weeks later, demand for the 364-day tenor surged to N2.872 trillion—more than seven times the N400 billion on offer—while shorter bills went undersubscribed.
Despite this massive oversubscription, the one-year stop rate has shown signs of stabilizing, easing marginally to 17.66% at the July 15 sale. The central bank has consistently accepted excess demand at the long end, allotting N1.06 trillion and N1.19 trillion respectively in the first two July auctions.
The auction will be executed via the central bank's electronic S4 Web Interface, a system mandated to improve transparency and price discovery. Only authorized money market dealers can bid directly, requiring other institutional and retail investors to route orders through these intermediaries. Under the Dutch auction format, the lowest yield bids are prioritized, and the final stop rate becomes the uniform yield paid to all successful bidders at that tenor.
Wednesday's sale will test whether this structural demand for one-year debt persists. The central bank retains the right to reject bids or vary the offer size based on prevailing conditions. Market participants will be watching closely to see if the stop rate continues its marginal easing or reverses course as the bank's broader liquidity absorption strategy intensifies.
