The Central Bank of Nigeria is set to auction N450 billion in Nigerian Treasury Bills on Wednesday, June 17, with settlement scheduled for June 18, according to an official notice issued to Primary Money Market Dealers.
The offer size falls well short of the N1 trillion figure published in the Debt Management Office’s updated second-quarter calendar, raising questions about whether the monetary authority has scaled back its borrowing target or intends to capture excess subscriptions at a later stage.
The auction will be conducted via the Dutch Auction system across three tenors. A total of N150 billion is allocated to 91-day bills, N50 billion to 182-day bills, and N250 billion to 364-day bills. Dealers are required to submit bids through the CBN’s Scripless Securities Settlement System, known as S4, between 8 a.m. and 11 a.m. on the day of the auction. Each bid must be at least N50,001,000 and submitted in multiples of N1,000. Authorised Market Dealers may submit multiple bids, either on their own account or on behalf of clients.
Successful bidders will receive allotment letters on June 18 and must complete payment to their CBN account by 11 a.m. the same day. The central bank retains the discretion to increase or reduce the total amount on offer, or to reject bids outright.
The discrepancy between the CBN’s offer and the DMO’s revised programme has not been formally addressed by the authorities. The DMO had expanded the entire NTB programme size to N4.8 trillion, up from the initial N3.95 trillion set in April, representing a 21.5 per cent increase. Net new borrowing for the quarter now stands at N1.6 trillion, more than double the original target of approximately N753 billion, while overall NTB maturities for the second quarter remain at N3.197 trillion.
Most of the additional borrowing is concentrated in the 364-day tenor, which climbed to N4.8 trillion in the revised calendar. This reflects a deliberate government strategy to lock in funding for longer durations and reduce the pressure of constant rollovers.
Investor appetite for government paper remains robust. At the June 3 NTB auction, the DMO offered N1 trillion and received bids totalling nearly N1.946 trillion, eventually raising about N1.457 trillion at higher rates across all tenors. Demand has persisted even as system liquidity tightens, with investors chasing elevated yields.
The expansion in NTB issuance coincides with aggressive liquidity management by the CBN through Open Market Operations. In a single OMO session in May, the central bank mopped up approximately N3.7 trillion from the banking system. Both Treasury bill auctions and OMO sales are used to absorb excess liquidity, although they are administered by different government entities.
The CBN is expected to conduct one more NTB auction before the close of the second quarter, in line with the DMO’s updated issuance calendar.
