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The Central Bank of Nigeria (CBN) has removed restrictions that prevented financial institutions participating in the Nigerian Foreign Exchange Market (NFEM) and primary auctions of government securities from accessing its Discount Window.
The apex bank also restored tenored repurchase operations with maturities of four to 90 days and expanded access to Open Market Operations (OMO) securities to individuals, corporates and non-bank financial institutions.
The changes are contained in a circular dated August 12, 2026, titled Review of Discount Window Restrictions and Open Market Operations Participation Framework, signed by Okey Umeano, Acting Director of the Financial Markets Department.
The CBN said the measures followed a review of developments and practices across the foreign exchange, money and fixed-income markets, alongside the frameworks governing the Standing Lending Facility (SLF), tenored repo operations and OMO participation.
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The new directives took immediate effect.
What the circular says
Under the revised framework, participation in the NFEM will no longer restrict an institution from accessing the CBN’s Discount Window.
- “Restrictions on access to the Discount Window arising from participation in the Nigerian Foreign Exchange Market (NFEM) are hereby removed,” the circular stated.
The CBN extended the same treatment to primary auctions of government securities, removing the previous restriction on Discount Window access associated with participation in those auctions.
The Discount Window, which includes access to the Standing Lending Facility, allows eligible financial institutions to obtain liquidity from the central bank.
However, the CBN retained the restriction covering OMO auctions. Institutions accessing the Discount Window cannot participate in an OMO auction on the same day.
This creates a differentiated regime in which banks can participate in the FX market and government securities auctions without losing access to the Discount Window, while the same-day restriction remains for OMO auctions.
The revised framework builds on the October 7, 2022 circular governing access to the Discount Window and the October 23, 2019 directive on OMO auctions.
Tenored repo operations return
The CBN also lifted the suspension of Tenored Repo Operations, giving it room to conduct repurchase transactions across approved maturities ranging from four to 90 days.
- “The suspension of Tenored Repo Operations is hereby lifted,” the regulator said.
- According to the circular, the transactions may be deployed “to support effective liquidity management, improve money market functioning and enhance monetary policy implementation.”
Repo transactions provide liquidity against securities for an agreed period, with the securities subsequently repurchased under predetermined terms.
Restoring tenored repos expands the range of instruments available to the CBN for managing liquidity beyond shorter-term facilities. The four-to-90-day range also provides flexibility to address liquidity conditions across different time horizons.
The circular did not specify the volume or frequency of the repo transactions, indicating only that the CBN may conduct them across approved tenors.
OMO access widened
The CBN also opened primary and secondary OMO market participation to all eligible investors through Deposit Money Banks.
- Eligible participants now include individuals, corporates and non-bank financial institutions. DMBs will remain responsible for submitting bids and settling transactions on behalf of their customers.
- The broader framework widens access to an instrument primarily used by the CBN to manage liquidity and support monetary policy implementation.
Despite expanding the investor base, the apex bank retained control over the size and timing of OMO issuances.
- “The volume, tenor and frequency of OMO issuances shall continue to be determined by the CBN in line with prevailing liquidity conditions and monetary policy objectives,” the circular stated.
OMO auctions will also continue under the existing single-bid auction structure.
The combination of broader OMO participation, restored tenored repo operations and relaxed Discount Window restrictions gives the CBN greater flexibility in managing liquidity across the financial system while giving market participants wider room to operate across the FX, money and fixed-income markets.
What you should know
Nairametrics earlier reported that the CBN pumped a net N5.21 trillion into the banking system over the past week, with a single N2.48 trillion Open Market Operations (OMO) repayment on August 11, the week’s largest one-day liquidity injection.
This was according to the financial data published by the apex bank on Tuesday, August 11 and 4.
The robust liquidity injection comes just a day ahead of the primary market auction, where the CBN, on behalf of the Debt Management Office (DMO), is targeting to raise N700 billion in Treasury Bills auction.
