The Central Bank of Nigeria (CBN) raised a total of N17.59 trillion through fresh issuances of Treasury bills and federal government bonds while redeeming N14.72 trillion of maturing securities between January and November 21, 2025, latest auction data has revealed.
The transactions resulted in a net withdrawal of N2.87 trillion from the banking system during the period, underlining the apex bank’s continued aggressive liquidity mop-up as it battles persistent inflationary pressures and works to defend the naira.
Primary market auctions serve as the main channel through which the federal government raises domestic debt to finance budget deficits and manage short-term cash-flow needs. Commercial banks, pension funds, asset managers, and retail investors are the primary buyers of these instruments.
Key Highlights of 2025 Activity
Activity was heaviest in the first quarter. January auctions generated N1.87 trillion in new borrowing against N596 billion in redemptions. February emerged as the busiest month for fresh issuances, with N3.26 trillion raised, followed closely by March at N3.12 trillion.
March also recorded the single largest repayment month of the year at N4.08 trillion, driven largely by maturities of instruments sold in the closing months of 2024.
The second quarter saw a slowdown in issuance volumes. April and May each recorded roughly N1.5 trillion in new sales, while June dropped to N712 billion as fewer large maturities rolled off.
The pattern shifted again in the second half. August stood out with the lowest repayment figure of the year at just N24 billion, reflecting a light maturity calendar, while October posted strong sales of N1.85 trillion amid renewed investor interest in longer-dated bonds.
In the first three weeks of November, the CBN sold N1.64 trillion worth of securities and redeemed N1.61 trillion, leaving only a marginal net injection as the year-end approaches.
Monetary Policy Context
The substantial net liquidity absorption of nearly N2.9 trillion aligns with the CBN’s tight monetary policy stance throughout 2025. By keeping large volumes of funds locked in government paper, the apex bank has sought to curb excess money supply, cool inflation, and reduce pressure on the foreign exchange market.
Analysts note that the sustained borrowing reflects ongoing fiscal deficits, with domestic debt instruments remaining the preferred financing route despite rising yields across the curve.
With one month left in the year, total primary market turnover for 2025 is already significantly higher than in previous years, underscoring both the government’s financing requirements and the central bank’s determination to maintain price and exchange-rate stability through active liquidity management.
