The Federal Government, through the Central Bank of Nigeria, raised N2.72 trillion worth of Nigerian Treasury Bills in the first two months of 2025, which is about an 8.6 per cent decline over the N2.97 trillion raised in the first two months of 2024, the apex bank has revealed.
The apex bank tightens its monetary policy through higher interest rates and large NTBs auctions, which curb rising inflation and stabilise the foreign exchange rate.
The CBN in its ‘Government Securities’ data, disclosed that it planned to raise an estimated N1.52 trillion from the investing public witnessed a subscription rate of N9.68 trillion and eventually settled for N2.72 trillion in the period under review.
NTBs or T-Bills as they are sometimes called are short-term debt securities issued by the government to make up for budget deficits and fund projects.
In Nigeria, NTBills are issued by the apex bank on behalf of the Federal Government.
By tightening its monetary policy through higher interest rates and large NTBs auctions, the CBN aims to curb rising inflation and stabilise the foreign exchange rate, thereby fostering a more balanced economic environment.
The Monetary Policy Committee of the CBN increased its interest rate by 870 basis points to 27.50 per cent from 18.75 per cent in 2024 to combat rising inflation.
This led to an equal increase in the yields of Treasury bills compared to last year.
However, the MPC members retained the interest rate at 27.50 per cent in its first meeting in 2025 in a move to reduce the payment burden.
The apex bank has been scaling back on elevated discount rates offered on NTBills amid strong demand and the fact that the benchmark interest rate has raced ahead of the country’s headline inflation.
It was observed that the stop rate for long maturities NTBs dropped to 18.43 per cent at the end of February 2025 auction from 22 per cent when CBN carried out its first auction in 2025.
Also, the stop rate for 182-DAY closed in February 2025 at 18 per cent from 18.50 per cent January 2025.
Despite the liquidity congestion in February, sentiment in the NTBills space was predominantly bullish, mostly due to the impact of the rebased CPI, which affected the dynamics of the Nigerian fixed-income market.
