CBN auctions N1.15 trillion Treasury Bills today in its second primary market auction for January 2026, amid elevated system liquidity and cautious investor sentiment over interest rates. The auction covers three maturities: 91 days (N150 billion), 182 days (N200 billion), and 364 days (N800 billion), reflecting both government funding needs and market preference for longer-dated, higher-yield securities.
Analysts say the heavy allocation to one-year bills underscores investor appetite for locking in returns amid uncertainty over the trajectory of short-term rates. The CBN has consistently relied on longer tenors to absorb excess liquidity while offering attractive yields for institutional investors.
Despite softer inflation prints in November, spot rates are expected to remain firm. At the December 2025 auction, 91-day bills sold at 15.80%, 182-day at 16.50%, and one-year bills at 18.47%, up from previous auctions. Observers attribute the higher yields to market concerns over inflation reversals, tight monetary policy, and sustained government borrowing.
Secondary market activity has remained subdued, with most maturities closing flat ahead of the primary auction. Only select papers, including the 09-Apr-26 and 07-Jan-27 tenors, recorded notable yield movements, while previous OMO sales totaling N2.64 trillion at rates near 19.38% have reinforced cautious sentiment.
The first Treasury bill auction of 2026 raised N1.144 trillion, with stop rates increasing across all maturities, indicating robust investor demand and a repricing of risk-free assets, especially for long-dated bills. Market participants expect today’s auction to provide fresh guidance on the short-term rate trajectory as liquidity conditions and inflation expectations continue to shape demand.
