CBN cuts rates at March 25 NTB auction amid liquidity glut

The Central Bank of Nigeria (CBN) has cut interest rates across two key tenors at its March 25, 2026 Treasury Bills (NTB) auction, reflecting a downward adjustment in yields amid a liquidity glut exceeding N8 trillion in the financial system.

This is according to auction result data obtained by Nairametrics, which showed that stop rates on the 182-day and 364-day instruments declined by 20 basis points to 16.42% and 16.43% respectively, while the 91-day bill remained unchanged at 15.95%.

The development comes weeks after the Monetary Policy Committee reduced benchmark rates, signalling a gradual easing of monetary conditions and pointing to lower yields across Nigeria’s fixed income market.

What the data is saying 

A breakdown of the auction results shows a divergence in investor appetite across maturities, with the 364-day bill dominating overall subscriptions.

• The 364-day instrument attracted N2.73 trillion in bids against a N200 billion offer, with the CBN allotting N394.88 billion.
• The 91-day bill recorded near-full subscription at N98.71 billion versus a N100 billion offer, with N97.75 trillion allotted.
• The 182-day bill lagged, drawing N66.58 billion in subscriptions against N100 billion offered, with only N28.04 billion allotted.

This pattern highlights a sustained trend where investors either remain in short-term instruments for liquidity or extend duration to lock in yields.

More insights

Further details from the auction reinforce the narrative of a liquidity-driven market skewed toward longer-tenor instruments.

• Total subscriptions far exceeded the combined N400 billion offered across tenors, driven largely by demand for the 364-day bill.
• The CBN responded by increasing allotment on the long tenor, reflecting stronger investor demand at that end of the curve.
• Bid rates showed wide dispersion, particularly on the 364-day instrument, ranging from 15.95% to 19.50%.

Analysts note that institutional investors are increasingly front-loading positions in long-dated securities in anticipation of further rate moderation.

The decline in longer-tenor yields suggests that rates may continue to ease if current liquidity conditions persist.

Get up to speed

The latest auction outcome aligns with recent trends where demand has consistently outpaced supply and concentrated on longer maturities.

• At the March 18, 2026, auction, the CBN allotted N691.86 billion out of N1.05 trillion offered despite N3.06 trillion in subscriptions.
• On March 11, 2026, subscriptions reached N2.78 trillion, more than double the N850 billion on offer.
• The March 4 auction recorded N2.34 trillion in subscriptions, with N1.01 trillion allotted.
• In February, demand surged to N4.28 trillion, with a strong preference for the 364-day instrument.

These trends underscore the persistent liquidity surplus in the system and sustained investor appetite for government securities.

What you should know

Even in late 2025, the dominance of the 364-day bill was evident, with the instrument attracting the bulk of subscriptions and yields rising as high as 17.5% before the recent moderation.

• The current rate compression reflects improved liquidity conditions across the banking system.
• Strong investor demand, particularly at the long end, continues to drive subscription levels above supply.
• Excess liquidity in the financial system, estimated above N8 trillions, is pushing investors to accept lower stop rates.
• The shift in yield direction signals changing expectations around monetary policy and future interest rates.

Taken together, the March 25 auction marks a subtle but important shift, as strong demand persists but yields begin to trend downward, suggesting that Nigeria’s fixed income market may be entering a phase of gradual rate normalisation.