Yields on Nigerian Treasury Bills dropped significantly in the latest auction, reflecting changing market conditions as investors anticipate the Central Bank of Nigeria’s (CBN) first Monetary Policy Committee (MPC) meeting of the year later on Thursday.
The auction, held on February 19, saw lower stop rates across all tenors despite strong demand, signaling a shift in investor expectations.
However, the apex bank only allotted N774.1 billion in total, far less than the N1.3 trillion worth of T-bills maturing, which contributed to a sharp drop in yields.
Declining yields amid policy adjustments
At the auction, the stop rate for the 91-day Treasury Bill fell to 17% from 18%, while the 182-day tenor dropped to 18% from 18.5%. The most subscribed 364-day tenor recorded a drop from 20% to 18.43%, continuing the trend of declining rates.
This comes against the backdrop of a decline in Nigeria’s inflation rate, which dropped to 29.90% in January 2025, following the CBN’s rebasing of the Consumer Price Index (CPI).