Allotments at Nigeria’s government securities auctions fell sharply in October 2026, dropping 55.86% to ₦9.501 trillion from ₦21.527 trillion in September, as demand ratios softened and authorities left large volumes of investor bids unallotted.
The Financial Markets Dealers Association (FMDA) October market report covers Nigerian Treasury Bills (NTBs), Open Market Operations (OMO) bills and Federal Government of Nigeria (FGN) bonds. The ₦12.026 trillion decline was driven mainly by a steep cut in OMO issuance. FGN bonds were the only category to see higher allotments during the month.
OMO and Treasury Bills Shrink; Bonds Edge Up
OMO issuance fell 64.69% to ₦6.182 trillion from ₦17.510 trillion. Treasury bill allotments dropped 45.86% to ₦1.309 trillion from ₦2.418 trillion. FGN bond issuance rose 25.70% to ₦2.010 trillion from ₦1.599 trillion.
Bid-to-cover ratios weakened across the board: NTBs to 2.19 times from 5.11 times, OMO to 1.70 times from 3.69 times, and FGN bonds to 1.00 times from 1.49 times meaning bond subscriptions roughly matched the amount on offer.
At the 28 October NTB auction, the Debt Management Office rejected about ₦1.84 trillion in bids and allotted only ₦71.16 billion against ₦1.908 trillion in subscriptions, despite demand running at 2.38 times the ₦800 billion offer. At the 14 October auction, roughly 74% of bids went unallotted, while the one-year stop rate rose five basis points to 15.90%.
Secondary-market turnover across the three instruments also declined 37.19% to ₦25.754 trillion from ₦41.002 trillion, with OMO accounting for ₦16.755 trillion of that activity.
Nigerian Bond Yields Rise as Global Yields Fall
Nigeria’s 10-year government bond yield climbed 40 basis points to 16.63% in October, moving against the trend in several major markets. The FMDA linked the domestic rise to softer auction demand rather than a change in monetary policy.
By comparison, the US 10-year yield fell 36 basis points to 4.93%, Japan’s dropped 30 basis points, South Africa’s 23 basis points, the UK’s 14 basis points and China’s six basis points. Kenya’s yield rose 13 basis points to 12.53%. Nigeria’s spread over the US 10-year stood at about 11.70 percentage points.
In the secondary market, average Treasury bill yields rose 28 basis points to 18.02%, led by the nine-month tenor at 18.71%. Average FGN bond yields increased 23 basis points to 16.18%, while average OMO yields eased to 18.88% from 19.81%.
At the 19 October FGN bond auction, the DMO allotted about ₦1.2 trillion, up from ₦748.64 billion in September. The stop rate on the 16.79% FGN September 2036 bond rose to 17.29% from 16.79%, pointing to higher borrowing costs on that instrument.
Less OMO Absorption, More System Liquidity
The drop in October OMO allotments followed heavy liquidity withdrawals in September, when the CBN sold about ₦17.51 trillion in OMO securities against maturities of ₦10.89 trillion a net drain of roughly ₦6.62 trillion.
In October the CBN allotted ₦6.182 trillion against ₦9.051 trillion in maturities, leaving a net repayment of about ₦2.87 trillion. Banking-system liquidity rose 56.75% to ₦7.373 trillion. FMDA market sources put foreign portfolio holdings of Nigerian OMO securities at more than $20 billion.
The association noted that keeping returns attractive for those foreign holders remains an important factor in the CBN’s interest-rate approach. The shift in issuance also underlines how maturities, fresh allotments and bank liquidity move together.
Naira Soft Despite Heavy Dollar Sales
The naira depreciated 0.87% to ₦1,338.99 per dollar on the Nigerian Foreign Exchange Market in October, even though CBN dollar sales exceeded $3 billion, according to FMDA. The parallel-market premium narrowed to ₦40.20 from ₦64.24, while foreign exchange reserves held near $55 billion.
Nigeria’s Eurobond yield fell 26 basis points to 7.32% as of 29 October, with a $105.94 million Eurobond coupon due in November. The Monetary Policy Rate stayed at 23% after September’s cut, with another MPC meeting scheduled for November.
FMDA advised banks to lengthen portfolio duration selectively rather than chase yields aggressively, noting that holders of existing securities faced modest mark-to-market losses.
What Investors Are Watching
Lower auction allotments, rising domestic bond yields and large projected system inflows make the next rounds of sales important signals for the fixed-income market. Investors will also track the CBN’s policy stance, the exchange rate and oil-price risks linked to the Middle East as they position for the rest of the year.
