The Central Bank of Nigeria (CBN) will withdraw an unprecedented N1.35 trillion from the banking system this month through an aggressive Treasury Bills (NTB) issuance programme, marking the largest monthly liquidity absorption planned so far in 2026 and signalling a sustained tightening of monetary conditions.
Under its July issuance calendar, the apex bank plans to raise N2 trillion through Treasury Bills while only N647.79 billion worth of existing bills mature during the month, resulting in a net liquidity withdrawal of approximately N1.35 trillion.
The July programme also launches the CBN’s Q3 2026 NTB issuance strategy, under which the bank intends to issue N5.8 trillion in Treasury Bills between July and September against maturities of N2.64 trillion, implying net new domestic borrowing of about N3.16 trillion during the quarter.
The aggressive borrowing programme reflects both the CBN’s determination to keep excess liquidity out of the financial system as part of its inflation-fighting strategy and the Federal Government’s continued dependence on the domestic debt market to finance fiscal obligations.
The first auction is scheduled for Wednesday, July 8, with the CBN offering N700 billion across three maturities.
The offer comprises:
- N100 billion in 91-day bills
- N100 billion in 182-day bills
- N500 billion in 364-day bills
Against the auction, Treasury Bills worth N269.36 billion will mature, leaving a net liquidity withdrawal of approximately N430.64 billion on settlement.
The stop rates remain unchanged from the June auction:
- 91-day: 16.28%
- 182-day: 16.50%
- 364-day: 17.34%
Tight liquidity to dominate July
The July calendar underlines an increasingly restrictive liquidity environment.The only respite comes on July 22, when N378.43 billion matures without any scheduled replacement auction, temporarily injecting liquidity into the banking system before the month-end auction absorbs those funds.
Market analysts expect demand to remain concentrated in the 364-day Treasury Bill, continuing the trend seen during the June 17 auction.
At that sale, the one-year instrument attracted subscriptions of N1.66 trillion against N800 billion offered, representing a 2.08 times bid-to-cover ratio.
By comparison:
- The 91-day bill recorded a modest 1.30x subscription;
- The 182-day bill was undersubscribed at 0.70x.
The strong appetite for longer-dated paper pushed the stop rate on the one-year bill to 17.34 per cent, up 99 basis points from 16.35 per cent at the previous auction.
Market participants expect the pattern to persist as institutional investors continue seeking higher yields amid elevated inflation and tight monetary conditions.
July’s planned N1.35 trillion net issuance is considered significant for several reasons.
It is nearly double the entire Q2 2026 net issuance target of N750 billion, making July alone the most aggressive month for Treasury Bill liquidity absorption this year.
The Q3 programme similarly points to sustained monetary tightening, with planned issuance exceeding refinancing needs by more than N3 trillion.
Beyond refinancing maturing obligations, the programme effectively expands short-term domestic debt while simultaneously withdrawing liquidity from the banking system.
That combination is expected to support the CBN’s inflation-control objectives but could also keep money market rates elevated, increase banks’ funding costs and sustain upward pressure on lending rates across the economy.
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