DMO rejects N1.84 trillion bids, pushes T-bill rates lower

The Debt Management Office (DMO) has rejected N1.84 trillion in bids for Nigerian Treasury Bills, resulting in a decline in the one-year stop rate to 15.80%. The Central Bank of Nigeria (CBN) allocated only N71.16 billion in subscriptions at the October 28, 2026 auction, with investor demand representing approximately 2.38 times the advertised offer of N800 billion.

This second consecutive auction in which most bids were unallotted follows a similar pattern from the October 14 auction, where approximately 74% of bids were not allotted. The 364-day instrument attracted N1.84 trillion in subscriptions, but the DMO granted only N38.38 billion, accounting for just 2.09% of total subscriptions. The one-year stop rate curve remained relatively flat, with only a 10-basis-point difference between the shortest and longest tenors.

This decision by the DMO contrasts with earlier auctions where stronger investor demand led to larger amounts being allotted. The increase in banking-system liquidity, supported by N2.13 trillion in Open Market Operations (OMO) maturities, contributed to the sustained demand for government securities. The DMO's refusal to allocate most bids highlights its willingness to limit borrowings and maintain lower stop rates.