Central Bank of Nigeria building. Photo: CBN
* CBN reopened tenored repurchase operations.
The Central Bank of Nigeria has relaxed restrictions preventing banks participating in foreign exchange transactions and government securities auctions from accessing its Discount Window, as part of changes aimed at improving liquidity management and money market operations.
The apex bank also lifted the suspension on tenored repurchase transactions and expanded participation in its Open Market Operations to eligible investors, including individuals, companies and non-bank financial institutions.
The changes were contained in a circular titled, “Review of Discount Window Restrictions and Open Market Operations Participation Framework,” published on the CBN’s website on Wednesday.
The circular, dated August 12, 2026, was sCBNCBNigned by the Acting Director of the Financial Markets Department, Okey Umeano, and addressed to deposit money banks, authorised dealers and the general public.
The CBN said the changes followed a review of developments and existing practices across Nigeria’s foreign exchange, money and fixed-income markets, as well as the framework governing access to its Standing Lending Facility, tenored repo operations and OMO.
The Standing Lending Facility, which forms part of the CBN’s Discount Window, provides eligible banks with access to short-term liquidity from the apex bank, particularly when they face temporary funding needs.
Under the previous framework, certain market activities could restrict financial institutions from accessing the facility.
The latest circular introduces a differentiated approach, removing some of those restrictions while retaining the rule governing same-day participation in OMO auctions.
On foreign exchange transactions, the CBN said, “Restrictions on access to the Discount Window arising from participation in the Nigerian Foreign Exchange Market are hereby removed.”
It similarly removed restrictions linked to banks’ participation in primary auctions of government securities.
“Restrictions on access to the Discount Window arising from participation in the primary auctions of Government securities are hereby removed,” the circular stated.
The decision means participation in the Nigerian Foreign Exchange Market or primary government securities auctions will no longer, by itself, prevent an eligible institution from accessing the CBN’s Discount Window.
However, the apex bank retained its restriction covering OMO transactions.
“The existing restriction on participation in OMO auctions by institutions accessing the Discount Window on the same day shall remain in force,” it said.
The retained restriction effectively maintains a separation between banks accessing central bank liquidity through the Discount Window and those participating in OMO auctions on the same day.
The CBN said the revised rules took immediate effect and were issued further to its October 7, 2022 circular on access to the Discount Window and an October 23, 2019 letter governing OMO auctions.
The apex bank also reopened tenored repurchase operations, expanding the liquidity management instruments available under its monetary operations.
“The suspension of Tenored Repo Operations is hereby lifted,” the CBN said.
It added that it “may conduct repo operations across approved tenors ranging from 4 to 90 days to support effective liquidity management, improve money market functioning and enhance monetary policy implementation.”
Repo transactions generally involve the temporary exchange of securities for cash, with an agreement to reverse the transaction at a specified date.
For banks, the instrument provides another channel for managing liquidity over periods longer than overnight facilities.
The four-to-90-day tenor provided in the new framework gives the CBN flexibility to inject liquidity for different periods depending on prevailing conditions in the financial system.
Beyond the changes to borrowing rules, the CBN also widened access to the OMO market, allowing eligible investors to participate in both primary and secondary markets through deposit money banks.
“OMO participation (primary and secondary markets) shall be open to all eligible investors through Deposit Money Banks,” the circular stated.
The bank identified eligible investors as individuals, corporates and non-bank financial institutions, while DMBs will continue to submit bids and settle transactions on behalf of their customers.
The revised framework therefore broadens the categories of investors able to gain exposure to OMO instruments, although transactions will continue to be routed through commercial banks.
Despite the broader participation, the CBN retained control over how much liquidity it withdraws through OMO and the maturity profile of securities offered to the market.
According to the circular, “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 apex bank also retained the existing single-bid structure for OMO auctions.
OMO is one of the key instruments used by the CBN to manage liquidity in the financial system. By selling securities, the apex bank can absorb excess liquidity, while its broader liquidity framework allows it to respond when funding conditions tighten.
The combination of broader OMO participation, restored tenored repo transactions and fewer restrictions on Discount Window access gives the CBN and financial institutions more channels for managing liquidity across the money market.
The revised framework also separates the treatment of different market activities. While banks involved in FX transactions and primary government securities auctions can access the Discount Window without the previous restrictions, institutions using the facility remain barred from participating in OMO auctions on the same day.
The CBN directed banks, authorised dealers and other market participants to comply with the revised rules immediately.
“The provisions of this Circular take immediate effect,” it said, adding that “all banks, authorised dealers and market participants.
