The Central Bank of Nigeria has revised several rules governing banks’ access to its liquidity facilities, foreign exchange transactions and Open Market Operations, introducing greater flexibility for financial institutions and investors.
The changes affect access to the CBN’s Discount Window, participation in the Nigerian Foreign Exchange Market, primary government securities auctions, Tenored Repo Operations and the OMO market.
According to the new framework issued by the apex bank’s Financial Markets Department, restrictions that previously prevented institutions from accessing the Discount Window after participating in certain foreign exchange and government securities transactions have been removed.
The changes take effect immediately.
However, the CBN retained one important restriction: an institution that accesses the Discount Window will still be prohibited from participating in an OMO auction on that same day.
The latest decision comes as the central bank continues to rely on market-based tools to manage liquidity and influence monetary conditions.
The CBN identifies OMO as its principal monetary-policy instrument, complemented by reserve requirements, discount-window operations and other tools.
FX-related restrictions lifted
One of the major changes concerns the relationship between foreign exchange market activity and access to the Discount Window.
Under the revised framework, participation in the Nigerian Foreign Exchange Market will no longer prevent an eligible institution from accessing the central bank’s liquidity facility.
The same applies to participation in primary auctions for government securities.
The move effectively separates those market activities from restrictions on access to central-bank liquidity.
The NFEM was established following the CBN’s reforms to Nigeria’s foreign exchange framework, including the move toward a willing-buyer, willing-seller system and the consolidation of the former market segments. The central bank says eligible foreign exchange transactions are conducted through the NFEM and processed by deposit money banks.
For banks and other market participants, the revised rule could provide greater flexibility in managing their daily positions without having to choose between participating in the FX or government securities markets and obtaining liquidity support from the CBN.
The change does not, however, remove the separate restriction surrounding OMO auctions.
Same-day OMO restriction remains
The CBN has retained the rule preventing institutions that access the Discount Window from participating in an OMO auction on the same day.
This distinction is important because the Discount Window and OMO serve different purposes within the monetary-policy framework.
The Discount Window provides liquidity support to eligible financial institutions, while OMO allows the CBN to influence liquidity conditions through transactions involving securities.
The central bank has continued to conduct OMO auctions in 2026. Its published government securities data show recent OMO transactions involving different maturities, demonstrating the continuing role of the instrument in liquidity management.
By retaining the same-day restriction, the CBN appears to be maintaining a boundary between institutions seeking central-bank liquidity and those simultaneously participating in liquidity-management operations through the OMO market.
Tenored Repo suspension lifted
Another significant element of the announcement is the restoration of Tenored Repo Operations.
The CBN has lifted the previous suspension, allowing it to conduct repo transactions across approved maturities ranging from four to 90 days.
Repurchase agreements, commonly known as repos, are financial transactions in which securities are exchanged for cash with an agreement to reverse the transaction at a specified future date.
The CBN has described repo operations as part of the market-based tools available for managing liquidity. Its educational material explains that repurchase transactions are temporary and are reversed when the agreed period expires.
The return of tenored repos gives the central bank another mechanism for injecting or managing liquidity over defined periods rather than relying exclusively on shorter-term interventions.
It could also provide banks and other eligible market participants with greater certainty when planning their liquidity positions.
The CBN said the restored repo framework is intended to support effective liquidity management, improve the functioning of the money market and strengthen monetary-policy transmission.
OMO market opened to wider group of investors
The central bank has also revised its rules governing participation in OMO transactions.
Under the new arrangement, eligible investors will be able to participate in both primary and secondary OMO markets through deposit money banks.
The eligible category includes individuals, corporate entities and non-bank financial institutions.
Deposit money banks will continue to act as the channel through which customers submit bids and settle transactions.
The change potentially broadens access to an important segment of Nigeria’s fixed-income market by allowing a wider range of investors to participate through commercial banks rather than limiting OMO activity primarily to traditional institutional participants.
For individuals and companies with an interest in short-term government-related securities, the revised framework could create additional opportunities to access OMO instruments through their banking relationships.
The CBN’s existing market infrastructure shows that OMO securities are issued at different maturities and through auction arrangements.
Issuance will still depend on liquidity conditions
Although the participation rules have been broadened, the CBN has retained control over the size, maturity and frequency of OMO issuance.
Those decisions will continue to depend on prevailing liquidity conditions and the central bank’s monetary-policy objectives.
This means the new framework does not guarantee a fixed volume or schedule of OMO securities.
Instead, the CBN will determine when and how much to issue based on its assessment of liquidity within the financial system.
The auctions will also continue to use the existing single-bid format.
Market participants will therefore have to continue monitoring individual auction announcements for details concerning the securities offered, applicable maturities and other transaction conditions.
What the changes mean for liquidity management
Taken together, the measures provide the CBN with a broader set of tools for managing liquidity across Nigeria’s financial markets.
Removing the FX and primary-auction restrictions allows banks to participate more freely in those markets while retaining access to central-bank liquidity when eligible.
Restoring tenored repos adds another instrument through which liquidity can be supplied or absorbed over periods of up to 90 days.
Meanwhile, widening OMO participation allows more categories of investors to access the market through deposit money banks.
These adjustments come against the background of the CBN’s broader effort to operate a market-based monetary-policy framework.
At its July 2026 meeting, the Monetary Policy Committee retained the Monetary Policy Rate at 26.5 per cent and maintained the Standing Facilities Corridor at +50/-450 basis points. It also kept the Cash Reserve Requirement for deposit money banks at 45 per cent.
The latest financial-market changes therefore represent an operational adjustment rather than a change in the headline policy rate.
Potential impact on banks and investors
For banks, the removal of the FX and primary government-securities restrictions could simplify day-to-day liquidity planning.
A bank participating in the NFEM or a primary government securities auction will no longer face the same access limitation to the Discount Window arising from those activities.
The restoration of tenored repos could also give banks another option for managing temporary liquidity requirements.
For investors, the expansion of OMO eligibility could increase participation in the primary and secondary markets.
However, participation remains subject to eligibility requirements and the requirement that transactions be conducted through deposit money banks.
The CBN also retains authority over the volume, maturity and timing of OMO issuance, meaning investors will still depend on market conditions and individual auction offerings.
Immediate implementation
The revised rules are effective immediately.
The CBN has directed banks, authorised dealers and other market participants to comply with the updated framework.
The announcement marks another adjustment to the central bank’s evolving approach to foreign exchange, money-market and fixed-income operations.
Rather than changing the direction of monetary policy through an alteration of the benchmark interest rate, the latest measures focus on how financial institutions interact with the CBN’s liquidity facilities and market instruments.
The immediate effect will be felt most directly by banks and other professional market participants, but the wider implications could extend to investors as the broader OMO participation framework takes effect.
With tenored repos restored, FX-related restrictions removed and OMO access expanded, the CBN now has a wider operational toolkit for responding to changes in banking-system liquidity while maintaining the existing safeguards around same-day Discount Window and OMO participation.
