By Ayomide Otitoju
The Central Bank of Nigeria (CBN) is set to return to the domestic debt market in September with a N700 billion Treasury Bills (T-bills) auction as part of ongoing efforts to manage liquidity in the financial system.
The auction, being conducted on behalf of the Debt Management Office (DMO), will feature 91-day, 182-day and 364-day Treasury Bills.
The CBN has allocated N100 billion each to the 91-day and 182-day instruments, while the 364-day bill will account for N500 billion of the offer.
Money market dealers are expected to submit bids through the CBN S4 Web Interface on September 2, 2026. The auction results are expected to be released the same day, with allotment scheduled for September 3.
Successful investors are required to make payment by 11:00 a.m. on the allotment date.
The latest auction highlights the CBN’s preference for longer-dated Treasury Bills, with the 364-day instrument accounting for more than 70 per cent of the N700 billion offer.
The move comes as investors continue to monitor fixed-income yields amid expectations of a possible shift in monetary policy.
At the August 26 NTB auction, the CBN reduced the stop rate on the one-year bill by 44 basis points to 17.15 per cent, after raising it to 17.59 per cent at the August 12 auction.
The September auction could provide fresh indications of the direction of short-term interest rates ahead of the next meeting of the Monetary Policy Committee.
The N700 billion offer forms part of the N5.8 trillion Treasury Bills issuance programme for the third quarter of 2026. The September 2 auction is one of the final three NTB auctions under the programme.
Under the Q3 programme, the DMO and CBN plan to issue N900 billion through 91-day bills, N900 billion through 182-day bills and N4 trillion through 364-day instruments.
Treasury Bills worth N2.64 trillion are expected to mature during the quarter, leaving an estimated net borrowing requirement of about N3.16 trillion.
The CBN has also continued to use Treasury Bills alongside Open Market Operations (OMO) to absorb excess liquidity from the banking system.
At the August 12 NTB auction, investors submitted bids worth about N4.4 trillion against the N700 billion offered, with the 364-day instrument alone attracting N4.19 trillion in subscriptions.
The strong demand points to continued investor appetite for high-yielding government securities, particularly longer-tenor instruments.
Market attention is now focused on whether the CBN will maintain its liquidity-management approach or allow Treasury Bills yields to decline further.
Cumulative allotments at the August 12 and August 26 auctions reached about N2.22 trillion, compared with a combined advertised offer of N1.4 trillion.
The level of allotment suggests that government securities could remain an important tool for liquidity management as market participants assess the outlook for monetary conditions.
