The Central Bank of Nigeria has removed restrictions that previously prevented financial institutions accessing its Standing Lending Facility from participating in foreign exchange transactions and primary government securities auctions.
The apex bank announced the changes in a circular dated August 12, 2026, signed by the Acting Director of its Financial Markets Department, Okey Umeano, and addressed to deposit money banks, authorised dealers and the general public.
Under the revised framework, institutions that access the CBN’s Discount Window will no longer lose eligibility for the facility simply because they participate in the Nigerian Foreign Exchange Market or primary auctions of government securities.
The decision removes two major restrictions previously linked to access to the central bank’s liquidity support facility.
According to the CBN, the changes followed a review of developments across the foreign exchange, money and fixed-income markets and are intended to give banks and other market participants greater flexibility in managing liquidity.
The new rules took immediate effect.
OMO Restriction Remains
The CBN, however, retained the restriction preventing institutions that access the Discount Window on a particular day from participating in Open Market Operations auctions on the same day.
The measure preserves a safeguard against institutions simultaneously accessing central bank liquidity support and participating in the CBN’s own liquidity-management operations.
The apex bank also broadened participation in the primary and secondary OMO markets to all eligible investors through deposit money banks.
The eligible investor base now includes individuals, corporate entities and non-bank financial institutions.
Under the arrangement, deposit money banks will continue to submit bids and settle transactions on behalf of their customers, expanding access to OMO investments through the banking system.
The CBN will retain control over the volume, tenor and frequency of OMO issuances, which will continue to be determined by prevailing liquidity conditions and monetary policy objectives.
The existing single-bid auction structure for OMO transactions will also remain in place.
CBN Restarts Tenored Repo Operations
The revised framework also provides for the resumption of tenored repurchase, or repo, operations, which had previously been suspended.
Repo transactions allow the central bank to inject or absorb liquidity from the financial system against eligible securities for specified periods.
The CBN said it could now conduct repo operations across approved tenors ranging from four to 90 days.
The measure is expected to give the apex bank greater flexibility in managing liquidity, improve money market functioning and strengthen the transmission of monetary policy.
The latest changes build on earlier reforms to the CBN’s monetary policy and financial market operating framework, particularly efforts to improve liquidity management and increase the effectiveness of market-based instruments.
The CBN’s guidelines governing access to the Discount Window were issued in October 2022, while the framework for OMO auction participation dates back to 2019.
The revised rules now distinguish more clearly between market activities that should affect access to central bank liquidity and those that should not.
While participation in the foreign exchange market and government securities auctions will no longer restrict access to the Discount Window, the same-day OMO restriction remains.
The CBN said all banks, authorised dealers and other market participants must comply strictly with the revised directives.
Author
