Primary Market Watch- Post Auction Analysis – 26 August 2026

Primary Market Watch: Treasury Bills & OMO (Post Auction Analysis – 26 August 2026 )

New OMO rules drive stop rates below 20% 

The Central Bank of Nigeria (CBN) conducted Open Market Operations (OMO) and Treasury bills auctions during the week, with both auctions recording strong investor demand amid improved system liquidity conditions. 

At the OMO auction conducted on 26 August 2026, the CBN offered N1.00 trillion across the 97-day and 132-day tenors. The auction attracted total subscriptions of N4.26 trillion, translating to a bid-to-cover ratio of 4.26x, reflecting robust investor participation following the recent expansion of OMO access to a broader investor base. Consequently, the CBN allotted a total of N2.80 trillion, significantly above the initial offer size. 

Notably, stop rates moderated to 19.90% (97-day) and 19.65% (132-day), declining below the 20% threshold compared with previous auctions where rates were above 20%. The moderation in stop rates suggests improved liquidity conditions and stronger market participation, as investors responded positively to the broader access framework. 

Following the OMO auction, the Central Bank of Nigeria (CBN), on behalf of the Federal Government, conducted the Treasury bills auction on Wednesday, August 26, 2026, offering N700 billion across the three standard maturities. The auction attracted robust investor demand, with total subscriptions reaching N3.79 trillion, translating to an overall bid-to-cover ratio of 5.41x. Demand for the 364-day Treasury bill remained exceptionally strong, while investor participation improved across the shorter tenors. Reflecting the sustained demand, the DMO allotted N762.89 billion, approximately 9% above the initial offer size. Notably, the 364-day stop rate declined by 44 basis points to 17.15%, indicating a reduction in the government’s borrowing cost at the long end. 

Market Backdrop 

Ahead of the Treasury bills auction, system liquidity remained supportive. Also, benchmark Treasury bill yields edged higher ahead of the auction, with the average secondary market yield increasing to 19.10% on 24 August from 18.17% on 12 August. The increase was driven primarily by higher yields at the short and medium segments of the curve, as the 1-month and 6-month benchmark yields rose to 17.41% and 19.31%, respectively. In contrast, yields at the longer end remained relatively stable, with the 9-month and 12-month benchmark yields at 19.89% and 20.34%, respectively. 

The elevated yield environment, coupled with ample system liquidity, continued to support demand for government securities, particularly the one-year Treasury bill. 

Tbill Yield	12/08/2026	24/08/2026	% Change
1M	16.07	17.41	1.35
3M	16.83	18.57	1.73
6M	17.95	19.31	1.36
9M	19.69	19.89	0.20
12M	20.32	20.34	0.02
Avg. Yield	18.17	19.10	0.93

Source: CBN, FMDA 

Auction Outcome 

Investor demand remained firmly concentrated on the 364-day Treasury bill, which attracted subscriptions of N3.63 trillion against an offer of N500 billion, translating to a bid-to-cover ratio of 7.26x. This reflects sustained investor appetite for longer-dated government securities. In response, the DMO allotted N638.19 billion for the tenor, above the initial amount offered. 

Demand at the shorter end of the curve remained relatively moderate. The 91-day Treasury bill attracted subscriptions of N103.32 billion against N100 billion offered, resulting in a bid-to-cover ratio of 1.03x. Similarly, the 182-day bill recorded subscriptions of N52.93 billion, translating to a bid-to-cover ratio of 0.53x, indicating weaker demand relative to the longer tenor. 

Stop rates were maintained at 16.30%, 16.50%, and 17.15% for the 91-day, 182-day, and 364-day tenors, respectively, suggesting that the DMO held its pricing stance despite evolving market conditions. 

Source: CBN, FMDA 

Market Insight 

• Investor demand for both OMO and Treasury bills remained robust, with combined subscriptions exceeding N8.0 trillion, underscoring strong appetite for fixed income securities. 

• The OMO auction recorded exceptionally strong demand, with subscriptions over 4x the offer size, reflecting the impact of expanded market participation and improved liquidity conditions. 

• The moderation in OMO stop rates below 20% signals easing funding pressures and a shift in pricing dynamics relative to previous auctions. 

• In the NTB segment, demand remained heavily concentrated at the long end, while weaker subscription levels at the 182-day tenor suggest continued investor preference for duration. 

• The divergence between stable NTB stop rates and rising secondary market yields indicates that the DMO maintained its pricing stance despite upward pressure in the broader market. 

• Looking ahead, the trajectory of yields will depend on subsequent liquidity conditions and the pace of CBN’s liquidity management operations, particularly through OMO issuances.