Nigerian Treasury Bills: Is the Rush Justified? Analyzing Soaring Demand & Yield Stability

Nigerian Treasury Bills are seeing some action. Specifically, the recent auction on November 19, 2025, witnessed a staggering N1.23 trillion in bids for the 364-day tenor, dwarfing the N450 billion offered. Investors clearly want in, hoping to secure high yields before potential interest rate cuts anticipated in 2026.

Yet, stop rates remained surprisingly steady. Rates for 91-day, 182-day, and 364-day papers held firm at 15.30%, 15.50%, and 16.04% respectively. Why no change despite the massive oversubscription?
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The Central Bank of Nigeria (CBN) allocated hefty sums, including N1.03 trillion for the 364-day bill. This hints at significant liquidity sloshing around the system.

True yields are attractive, hovering around 19.104% for the 364-day paper. Financial analysts seem a bit perplexed by the unchanged rates despite such strong demand. Could this signal that yields have peaked? It’s a definite possibility.

Compared to the November 5 auction, the intensified focus on longer maturities is clear. Demand for the 364-day paper jumped, suggesting a strategic shift toward locking in those higher returns. But should investors get too comfortable?
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Some suggest that excess liquidity and a lack of attractive alternatives fuel the frenzy. Falling inflation further reinforces the anticipation of policy easing. The CBN’s recent moves to ease liquidity and bolster reserves likely contribute as well.

Still, the CBN held firm on rates. A Lagos-based fixed-income trader suggests that the flat rate structure points to yield stability in the short term, with any softening probably being gradual and tied to ongoing liquidity.

What’s the driving force here: liquidity or the inflation outlook? Many expected that demand, spurred by excess funds, limited options, declining inflation, and expectations of policy shifts, would prompt rate cuts. But the CBN seemingly chose a different route.

Looking ahead, expect intense competition in upcoming auctions as institutions tweak balance sheets before Q1 2026. A softening of rates is plausible, particularly if inflation keeps trending downward. For now, these T-Bills, delivering around 19% true returns, remain appealing for those seeking relatively risk-free returns. Investors are moving swiftly, securing yields before a potential downturn. This pattern is nothing new; it’s a familiar dance in the Nigerian financial landscape. Time will reveal whether this dash for T-Bills truly pays off.

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