The Central Bank of Nigeria has revised its liquidity management rules, allowing banks involved in foreign exchange transactions and primary government securities auctions to access its Discount Window without the restrictions previously attached to those activities.
The apex bank also lifted its suspension of tenored repurchase operations and broadened participation in Open Market Operations to individuals, companies and non-bank financial institutions.
The changes were announced in a circular titled “Review of Discount Window Restrictions and Open Market Operations Participation Framework,” dated August 12, 2026, and signed by the Acting Director of the Financial Markets Department, Okey Umeano.
The directive, addressed to deposit money banks, authorised dealers and the general public, takes effect immediately.
FX and government securities restrictions removed
Under the revised framework, participation in the Nigerian foreign exchange market will no longer prevent an eligible bank from accessing the CBN’s Discount Window.
The same applies to banks that participate in primary auctions of Federal Government securities.
The CBN said the restrictions linked to both activities had been removed following its review of conditions in the foreign exchange, money and fixed-income markets.
The Discount Window, which includes facilities such as the Standing Lending Facility, allows eligible banks to obtain short-term funding from the central bank when they face temporary liquidity pressures.
However, the CBN maintained one important restriction.
Banks that access the Discount Window will still be barred from participating in OMO auctions on the same day.
The arrangement means banks can now engage in FX transactions or primary government securities auctions and still seek liquidity from the CBN, but they cannot combine same-day Discount Window access with participation in OMO auctions.
CBN restores tenored repo operations
The central bank also announced the return of Tenored Repo Operations, which had previously been suspended.
Under the new framework, the CBN can conduct repo transactions with maturities ranging from four days to 90 days.
The bank said the move was intended to strengthen liquidity management, improve the functioning of the money market and support the effective implementation of monetary policy.
A repo transaction generally involves a temporary exchange of securities for cash, with the securities later repurchased at an agreed date.
The restored facility therefore gives banks another option for managing funding needs beyond overnight liquidity facilities.
The CBN can determine the appropriate tenor depending on prevailing liquidity conditions and its monetary policy objectives.
More investors can access OMO market
The revised framework also opens up participation in the CBN’s OMO market.
Eligible investors can now participate in both primary and secondary OMO transactions through deposit money banks.
The eligible categories include:
- Individuals
- Corporate entities
- Non-bank financial institutions
Commercial banks will continue to submit bids and handle settlement for customers, meaning investors will access the OMO market through their respective banks.
The change potentially gives a wider range of investors direct exposure to OMO securities while retaining the CBN’s control over the market.
The central bank said it would continue to determine the volume, tenor and frequency of OMO issuances based on liquidity conditions and monetary policy objectives.
The existing single-bid structure for OMO auctions will also remain.
What the changes mean for the financial system
The latest measures give the CBN additional tools to influence liquidity while providing banks with more options for managing short-term funding requirements.
The restored four-to-90-day repo facility allows the central bank to provide liquidity over different periods, while expanded OMO participation could increase the pool of investors able to absorb securities when the CBN seeks to withdraw excess liquidity.
At the same time, removing the previous Discount Window restrictions linked to FX transactions and primary government securities auctions reduces the penalties banks previously faced for participating in those markets.
The CBN said the revised framework followed a review of its earlier rules, including the October 7, 2022 circular on Discount Window access and the October 23, 2019 framework governing OMO auctions.
All deposit money banks, authorised dealers and other market participants were directed to comply with the new provisions immediately.
