The Central Bank of Nigeria (CBN) has eased restrictions on financial institutions accessing its liquidity support facilities, allowing banks that use the Standing Lending Facility (SLF) to participate in foreign exchange and primary government securities transactions.
The changes, which took effect immediately, are part of a review of developments in the foreign exchange, money and fixed-income markets and are aimed at giving financial institutions greater flexibility in managing liquidity.
The apex bank announced the measures 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 would no longer be barred from the facility simply because they participate in the Nigerian Foreign Exchange Market (NFEM) or primary auctions for government securities.
The decision removed two restrictions that had previously limited banks’ ability to combine central bank liquidity support with participation in key financial markets.
The CBN, however, retained a restriction on institutions participating in Open Market Operations (OMO) auctions on the same day they access the Discount Window.
CBN Restores Tenored Repo Operations
In another significant change, the apex bank announced the resumption of tenored repurchase, or repo, operations, which had previously been suspended.
Repo transactions enable the central bank to inject or withdraw liquidity from the financial system against eligible securities for specified periods.
Under the new framework, the CBN may conduct repo operations across tenors ranging from four to 90 days, giving it an additional mechanism for managing liquidity beyond very short-term interventions.
The move is expected to strengthen the central bank’s ability to calibrate liquidity conditions, improve money-market functioning and enhance the transmission of monetary policy.
The latest review represented another adjustment to the CBN’s financial-market operating framework as the apex bank continues to rely more heavily on market-based instruments for monetary policy implementation.
The central bank has also broadened participation in OMO transactions.
Under the revised framework, eligible investors will be able to participate in both the primary and secondary OMO markets through deposit money banks.
The expanded category includes individuals, corporate entities and non-bank financial institutions.
While DMBs would continue to submit bids and settle transactions on behalf of their customers, the arrangement effectively increases the number and diversity of investors that can access OMO instruments through the banking system.
The CBN, however, retained control over the scale and timing of OMO interventions.
It said the volume, tenor and frequency of OMO issuances would continue to be determined by prevailing liquidity conditions and monetary policy objectives.
The apex bank also retained the existing single-bid auction structure for OMO transactions.
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 strengthen the transmission of policy decisions.
The apex bank had issued guidelines for access to its Discount Window in October 2022, while its framework governing OMO auction participation dates back to 2019.
The revised rules now draw a clearer line between market activities that should affect access to central bank liquidity and those that should not.
Participation in the foreign exchange market and primary government securities auctions will no longer constitute grounds for restricting access to the Discount Window.
The continued restriction on same-day OMO participation, however, preserves a safeguard against institutions simultaneously accessing the CBN’s liquidity window and taking part in the central bank’s own liquidity-management operations.
The return of four-to-90-day repo operations also gives the CBN greater room to manage liquidity over varying time horizons.
The broader OMO investor base, meanwhile, is expected to deepen participation in the market by opening access beyond traditional institutional investors.
The CBN directed banks, authorised dealers and other market participants to ensure strict compliance with the revised directives.
