The Central Bank of Nigeria (CBN) is scheduled to conduct a Treasury Bills (T-bills) Primary Market Auction (PMA) on Wednesday, February 18, 2026, marking its second auction of the month. A total of N1.15trn will be offered across the trio of maturities, comprising N150.00bn in 91-day bills, N200.00bn in 182-day bills, and N800.00bn in 364-day bills. In the same vein, bills worth N33.81bn, N27.70bn, and N704.38bn across the three maturities are scheduled to mature during the week, totaling N765.89bn, implying a net borrowing position of N384.11bn.
Outlook on Yield
Investor appetite remained strong at the last recent primary market auction (PMA), in line with the robust demand trend observed since the start of the year. Total subscriptions increased by +33.41% to N4.59trn, up from N3.44trn at the January 21, 2026, auction, significantly exceeding the amount on offer. The sustained demand was driven by ample system liquidity, which stood at N2.24trn as of February 3, largely supported by maturing OMO instruments totaling N1.03trn. The 364-day bill once again remained the bellwether at the auction, attracting the bulk of investor demand with total subscription of N4.40trn, up from N3.35trn previously, due to continued preference for the long end of the curve.
The significant oversubscription provided room for further yield compression, with the stop rate declining by 138 bps to 16.98% from 18.36% at the 364-day, as the CBN took advantage of strong demand to moderate borrowing costs. Activity also improved at the short and mid-tenors as the 91-day and 182-day instruments recorded stronger demand relative to the previous auction, although stop rates remained unchanged at 15.84% and 16.65%, respectively. As a result, both the bid-to-cover and subscription-to-offer ratios improved further to 4.81x and 3.99x, respectively (vs 3.24x and 2.99x at the previous auction).
Post auction, the tone was bullish in the secondary market, where Treasury bills yield maintained a downtrend, following the outcome of the last auction. Average NTB yields declined to 17.53% as of February 16, 2026, from 18.18% recorded on February 4, reflecting sustained demand across the curve. Yield compression was broad-based, with the mid-to-long segment declining by 71 bps and 93 bps, respectively. We attribute this rally to renewed buying interest from investors with unmet bids at the primary auction, who subsequently turned to the secondary market to fill positions.
Our expectation for tomorrow’s auction is for lower stop rates across all tenors, supported by the system’s strong liquidity. System liquidity remains significantly elevated at N3.39trn as of 17 February 2026, compared with N2.25trn on 4 February 2026, which should continue to underpin strong investor demand. In addition, the marginal moderation in January inflation to 15.10% from 15.15% in December appears to have reinforced bullish sentiment in the secondary T-Bills market, a trend we believe could carry into the auction. We do not rule out the possibility of an upward tilt given the successive OMO auction offers on significantly short-term instruments, in the bid to mop up liquidity. Our expectation for rate outcome at tomorrow’s auction favours lower stop rates across all tenors.
Given the above, our rate guidance is informed by the need to strike a balance between maximising investment returns and having a successful bid. Thus, the recommended stop rates for the respective instruments are as follows (see table below)
