The Central Bank of Nigeria (CBN) will return to the primary market today for the second and final Treasury Bills auction of August 2026, offering N700 billion across the standard three tenors in a sale that caps off one of the most turbulent months for Nigeria’s short-term debt market in recent memory.
Acting on behalf of the Debt Management Office, the Apex Bank is inviting bids from authorized money market dealers through its S4 Web Interface, with the window open from 8:00 a.m. to 11:00 a.m. today.
As has become customary under the CBN’s current liquidity management stance, the offer skews heavily toward the long end of the curve: N100 billion apiece for the 91-day and 182-day bills and a dominant N500 billion for the 364-day paper, a split that underscores the bank’s continued appetite for locking funds away over longer horizons rather than churning short-dated liquidity.
The mechanics remain unchanged from previous auctions. Bidding will run via the Dutch auction system, with dealers free to submit multiple bids either for their own books or on behalf of non-Money Market Dealers and members of the public, provided each bid comes in multiples of N1,000 and meets the N50,001,000 minimum threshold.
Results are expected later today, allotment letters go out tomorrow, and successful bidders must settle with the CBN by 11:00 a.m. on allotment day. As always, the bank has reserved its right to reject bids outright or adjust the offer size if market conditions warrant.
What makes today’s auction notable isn’t its structure; it’s the context. This is only the second Treasury Bills sale the CBN has actually completed in August, after a first attempt that never made it to the finish line.
The bank had originally scheduled its opening August auction for August 6, with bids due a day earlier, again targeting N700 billion across the same three tenors.
But that auction was scrapped just days after the CBN had pulled a combined N4.69 trillion out of the banking system through consecutive Open Market Operations auctions on August 3 and 4.
With that much liquidity already mopped up, running a fresh N700 billion NTB sale so soon risked squeezing the system too hard, and the CBN opted to stand down rather than risk over-tightening.
It returned to the market a week later, on August 12, with the same N700 billion offer. That auction turned out to be anything but routine.
Total subscriptions came in at N4.4 trillion, more than six times the amount on offer, with the 364-day bill alone drawing N4.19 trillion in bids against its N500 billion allocation, an oversubscription of more than eightfold.
The scale of demand pointed to just how much idle liquidity was still chasing high-yielding, long-dated government paper despite the CBN’s earlier OMO drain.
Rather than lean into that demand by trimming yields as it had done in the two auctions before it, the CBN went the other way on the one-year tenor, lifting the stop rate by 24 basis points to 17.59% from 17.35%, before allotting N1.26 trillion on that bill alone.
The shorter tenors were left untouched: the 91-day held at 16.30% and the 182-day at 16.50%, with N148.57 billion and N47.48 billion allotted, respectively. All told, the CBN allotted roughly N1.456 trillion against a N700 billion offer that day, more than double what it had originally put up for sale.
With the August 5/6 auction cancelled and August 12 standing as the only completed sale of the month until now, today’s N700 billion offer effectively serves as August’s closing statement on Treasury Bills policy.
Market watchers will be paying close attention to where the 364-day stop rate settles, given the sharp uptick two weeks ago and the sheer scale of demand that auction attracted.
Whether the CBN holds the line at elevated yields, eases marginally in response to abundant system liquidity, or pushes rates higher still will offer an early signal of how the bank plans to calibrate its liquidity and rate strategy heading into September, particularly after a month defined as much by what didn’t happen (the cancelled auction) as by what did.
WHAT YOU SHOULD KNOW
August 2026 has been a month of unusual volatility in Nigeria’s Treasury Bills market, marked by a cancelled auction, a massively oversubscribed sale, and a surprise rate hike on the one-year bill.
Today’s N700 billion offer, split N100bn/N100bn/N500bn across the 91-day, 182-day, and 364-day tenors, is the month’s second and final auction.
Despite the CBN’s earlier N4.69 trillion liquidity mop-up via OMO, demand for long-dated government paper remains extremely strong, and the CBN has shown it’s willing to raise yields rather than cut them when subscriptions surge, a signal that borrowing costs on Nigerian government debt may stay elevated into September.
