The Central Bank of Nigeria returns to the Treasury bills market today with a ₦1.15 trillion auction.
This sale marks the second T-bill auction for January 2026.
Liquidity Meets Policy Signals
Liquidity remains ample across the banking system; however, interest rate expectations continue to divide investors.
The CBN offers bills across the 91-day, 182-day and 364-day maturities.
Through this structure, the Bank reinforces its reliance on short-term domestic borrowing to manage liquidity.
Meanwhile, investors focus closely on pricing rather than headline size.
On one hand, easing inflation signals support softer rates.
On the other, the CBN maintains a firm monetary stance.
As a result, elevated borrowing needs continue to pressure short-term yields.
Therefore, today’s auction should provide clear guidance on near-term rate direction.
Longer Tenors In Focus
According to the offer circular, the CBN favours longer-dated instruments.
Specifically, the Bank allocates ₦150 billion to 91-day bills.
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In addition, it assigns ₦200 billion to the 182-day tenor.
Most importantly, it channels ₦800 billion into the one-year bills.
Market dealers say this skew reflects funding priorities and investor demand for higher yields.
In recent auctions, investors consistently concentrated demand at the 364-day segment.
During the final quarter of 2025, yields climbed across the curve.
In December, one-year bills cleared at 18.47%.
Notably, this increase occurred despite signs of moderating inflation.
Consequently, the CBN signalled caution over inflation sustainability.
CBN Market Awaits Rate Direction
Meanwhile, secondary market trading remains uneven.
Investors largely adopted a wait-and-see approach, keeping most maturities flat.
Despite strong system liquidity, activity stayed light.
Only select longer-dated papers recorded yield increases.
Earlier, OMO sales cleared at elevated stop rates, shaping market sentiment.
Following these trades, average Treasury bill yields edged higher.
At the first NTB auction of 2026, the CBN raised ₦1.14 trillion.
Investors repriced risk-free assets, particularly at the long end.
Recently, demand for naira assets improved, pulling some yields lower.
Ultimately, today’s auction will test appetite and set the tone for short-term rates.
