CBN To Roll Over Treasury Bills This Week

The Central Bank of Nigeria plans another Primary Market Auction (PMA) for Treasury Bills this week, rolling over short-dated sovereign paper across the 91-, 182- and 364-day tenors. 

Yield hunters,retail and institutional alike,will watch where the 1-year stop rate lands relative to inflation expectations and recent secondary-market prints. Robust demand has been a theme all year, but the balance between liquidity, fiscal funding needs, and inflation will influence the final cut-offs.

For retail and HNIs, a laddered approach remains prudent. Splitting bids across the three maturities can manage reinvestment risk while still capturing attractive yields if the curve remains elevated. 

Institutions may extend duration at the longer tenor to lock rates, especially if macro signals point to gradual disinflation. 

Tactical investors could also monitor the interbank market and Open Market Operations for clues on liquidity conditions ahead of the PMA.

Key risks include inflation surprises, FX headlines that swing sentiment, and competing issuance (e.g., bonds) that may reprice the front end. On the upside, continued stability in system liquidity should support healthy coverage ratios. 

Post-auction, secondary trading often offers windows to optimise yield,either by taking quick gains on marked-up allotments or rotating into better-priced paper.