T-bill yields fall to 2026 lows after rate cut as bids reach N4.23 trillion

Treasury bill stop rates fell to their lowest levels of 2026 at the auction on September 23, the first pricing test after the CBN cut the MPR to 23 per cent. Total bids rose to N4.23 trillion from N2.64 trillion at the September 9 auction, for an overall bid to cover ratio of 8.46 times compared with 3.52 times previously, according to the Financial Markets Dealers Association (FMDA).

Bloomberg reported the same signal, noting the 182 day tenor at 15.8 per cent, the lowest since December, and the one year tenor at 15.89 per cent, the lowest since October.

Auction outcome in full

The CBN, on behalf of the Federal Government, offered N500 billion across three tenors, down from N750 billion on September 9, with the 364 day offer cut to N300 billion from N500 billion, according to FMDA. It allotted N497.59 billion, marginally below the offer size, as weak demand at the short end offset over allotment on the long end.

• 91 day: N54.93 billion in bids against N100 billion offered, a 0.55 times cover. N11.03 billion allotted. Stop rate 15.50 per cent, down 80 basis points.
• 182 day: N82.23 billion in bids against N100 billion offered, a 0.82 times cover, up from 0.29 times previously. N39.49 billion allotted. Stop rate 15.80 per cent, down 70 basis points. Bloomberg put the amount at 39.5 billion naira, about 29.7 million dollars.
• 364 day: N4.09 trillion in bids against N300 billion offered, a 13.65 times cover, up from 5.07 times previously. N447.07 billion allotted, about 49 per cent above the amount offered. Stop rate 15.89 per cent, down 73 basis points.

The 364 day stop rate has now fallen by 177 basis points since mid July, from 17.66 per cent on July 15 to 15.89 per cent, according to FMDA. For the path into this auction, our CBN hold note tracked the elevated corridor that preceded the reset, and our CBN cut note sets out the new 23 per cent anchor.

Why demand clustered at the long end

Two forces met on the day. System liquidity improved to N7.45 trillion from N2.86 trillion at the close of the prior week, according to FMDA. At the same time, the 350 basis point MPR cut reinforced expectations of a lower rate path, so bidders moved to secure longer dated paper before future offers price lower.

The split was stark. The 364 day tenor drew about 96 per cent of all bids, while the 91 day and 182 day tenors were both undersubscribed. The Nation summarised the same read, noting the 90 and 180 day tenors were undersubscribed by 31 per cent while the 364 day tenor was oversubscribed by over 10 times.

Secondary market yields had already started to adjust. The average secondary yield eased by 36 basis points to 18.46 per cent on September 22 from 18.82 per cent on September 9, according to FMDA, led by the 1 month, 3 month and 6 month benchmarks at 17.16, 17.00 and 18.98 per cent. The 9 month and 12 month benchmarks were broadly steady at 19.90 and 19.27 per cent.

What it means beyond the auction

Lower stop rates reduce the cost of short term borrowing for the government and reset the reference that banks and funds use to price deposits, commercial paper and money market holdings.

The same day, The Nation reported the naira at N1,331 per dollar official and N1,385 parallel on September 23, with the NGX up 0.23 per cent and market capitalisation at N163.06 trillion. That joint print, firmer bills demand plus steady equities and FX, matches the rotation channel described in the CBN cut note: when bill yields fall by less than the policy cut, part of the demand stays in bills while part looks to longer duration and stocks.

What to watch

• Secondary repricing: whether the 12 month benchmark follows the 15.89 per cent stop lower or holds near 19.27 per cent.
• Liquidity operations: whether OMO issuance absorbs the N7.45 trillion liquidity balance and slows the fall in stops.
• Next primary offer size: whether the DMO keeps the 364 day offer near N300 billion or restores it toward N500 billion.
• Short end tone: whether 91 day and 182 day covers recover from 0.55 and 0.82 times, or duration preference persists.

Frequently asked questions

Frequently asked questions

What were the stop rates on September 23?

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91 day at 15.50 per cent, 182 day at 15.80 per cent, and 364 day at 15.89 per cent, down 80, 70 and 73 basis points respectively, according to FMDA.

How strong was demand?

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Total bids were N4.23 trillion against a N500 billion offer, an 8.46 times cover. The 364 day tenor drew N4.09 trillion against N300 billion offered, a 13.65 times cover, while the two shorter tenors were undersubscribed.

Is this the lowest of 2026?

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For primary stops, yes on the reported tenors. Bloomberg places the 182 day at its lowest since December and the one year at its lowest since October, which spans the 2026 calendar. The 364 day path from 17.66 per cent on July 15 to 15.89 per cent confirms the 2026 low on that tenor.

Verify: compare the FMDA post auction analysis for September 23, 2026 with CBN government securities data on the Central Bank of Nigeria website.