The Central Bank of Nigeria (CBN), acting on behalf of the Debt Management Office (DMO), is set to conduct its third and final Nigerian Treasury Bills auction for July. The apex bank aims to raise N700 billion through this primary market auction scheduled for Wednesday, July 29, 2026.
An invitation to tender, seen on Friday, July 24, indicates that the auction will feature 91-day, 182-day, and 364-day tenors. This strategy highlights the CBN’s continued preference for longer-dated papers, a trend observed throughout the third quarter.
The N700 billion offer is structured with N100 billion allocated for the 91-day bill, N100 billion for the 182-day bill, and a substantial N500 billion for the 364-day bill. All Money Market Dealers are required to submit bids through the CBN S4 Web Interface within the window of 8:00 a.m. and 11:00 a.m. on the auction day.
Each bid must be in multiples of N1,000, with a minimum of N50,001,000. Dealers are permitted to submit multiple bids on their own account or on behalf of non-Money Market Dealers and members of the public. The auction results are expected to be announced on Wednesday, July 29, 2026, with allotment letters issued on Thursday, July 30, 2026. Payment for successful bids is due to the CBN not later than 11:00 a.m. on the same day.
The auction will utilize the Dutch auction system, a competitive bidding process where investors specify both the amount they wish to purchase and their desired yield. The CBN allocates bills starting from the lowest yield bids upwards until the total offering is fully subscribed. This means lower-yield bids have a better chance of full allotment, while higher-yield demands risk partial or rejected allotment.
Bids are submitted electronically through the CBN’s Scripless Securities Settlement System (S4 Web Interface). This platform, administered by the apex bank, ensures safe and efficient electronic acquisition, allotment, and transfer of government securities. The S4 system serves a similar function for government securities as the Central Securities Clearing System (CSCS) does for stocks on the Nigerian Exchange, holding ownership records for successful bidders.
Only Authorized Money Market Dealers can bid directly on the S4 platform. Individual investors and non-dealer institutions seeking exposure to the auction must do so through these dealers, who act as both bidding agents and custodians. The CBN’s reinforcement of mandatory electronic bid submission via S4 across several 2026 auctions aims to reduce manual errors, improve transparency, and support more competitive price discovery for stop rates.
Under the Dutch auction system, the eventual stop rate—the highest yield accepted before the offer size is exhausted—becomes the uniform rate paid to all successful bidders at that tenor, irrespective of their individual bid rates. The CBN reserves the right to reject any bid or vary the amount on offer based on prevailing market conditions.
This July 29 auction is part of the CBN’s expanded Q3 2026 NTB Issuance Programme, which targets N5.8 trillion in gross issuance between July and September. This represents more than four times the net target set for the previous quarter, indicating a significant liquidity mop-up strategy.
At the July 8 auction, the CBN allotted N1.06 trillion against a N700 billion offer, with the one-year rate sharply hiked to 17.70% from 17.34% at the June 17 auction. The 364-day bill alone attracted N1.86 trillion in bids. Subsequently, at the July 15 auction, investors poured N2.872 trillion into the 364-day instrument, more than seven times the N400 billion on offer, while the 91-day and 182-day bills were undersubscribed.
The CBN allotted a total of N1.19 trillion at the July 15 auction, with the one-year stop rate easing slightly to 17.66% from 17.70% previously. The consistent pattern across these two auctions shows overwhelming institutional demand for the 364-day bill and muted appetite for shorter tenors. The CBN has also shown a willingness to significantly overshoot its advertised offer sizes to accept excess demand at the long end, a trend expected to continue at the upcoming July 29 auction. All eyes will be on whether the stop rate continues its marginal downward drift or reverses course amid the CBN’s broader liquidity mop-up strategy for Q3 2026.
