ABUJA, Nigeria — The Central Bank of Nigeria has relaxed restrictions preventing banks participating in foreign exchange transactions and government securities auctions from accessing its Discount Window. This move is part of broader 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 (OMO) to a wider range of eligible investors, including individuals, companies, and non-bank financial institutions.

These changes were detailed 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 signed by Okey Umeano, the Acting Director of the Financial Markets Department.

The CBN stated that the adjustments followed a review of developments in Nigeria’s foreign exchange, money, and fixed-income markets, as well as the framework for accessing its Standing Lending Facility, tenored repo operations, and OMO.

The Standing Lending Facility, a component of the CBN’s Discount Window, offers eligible banks short-term liquidity from the central bank to address temporary funding needs. Previously, certain market activities could disqualify financial institutions from using this facility.

The new circular introduces a differentiated approach, removing some of these previous restrictions. However, the rule governing same-day participation in OMO auctions remains in force.

Regarding foreign exchange transactions, the CBN announced, “Restrictions on access to the Discount Window arising from participation in the Nigerian Foreign Exchange Market are hereby removed.” Similarly, restrictions linked to banks’ participation in primary auctions of government securities were also lifted.

This means that engaging in the Nigerian Foreign Exchange Market or primary government securities auctions will no longer, on its own, prevent an eligible institution from accessing the CBN’s Discount Window. The apex bank, however, maintained its restriction concerning OMO transactions.

“The existing restriction on participation in OMO auctions by institutions accessing the Discount Window on the same day shall remain in force,” the circular stated. This ensures a separation between banks accessing central bank liquidity via the Discount Window and those participating in OMO auctions concurrently.

The revised rules took immediate effect, building upon the CBN’s October 7, 2022 circular on Discount Window access and an October 23, 2019 letter governing OMO auctions.

The CBN has also reopened tenored repurchase operations, thereby expanding the liquidity management instruments available for its monetary operations. “The suspension of Tenored Repo Operations is hereby lifted,” the CBN announced.

The bank indicated 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 typically involve the temporary exchange of securities for cash, with an agreement to reverse the transaction later.

For banks, this instrument offers an additional channel for managing liquidity over periods longer than overnight facilities. The new framework’s four-to-90-day tenor provides the CBN with flexibility to inject liquidity for varying durations based on prevailing financial system conditions.

Beyond borrowing rules, the CBN has also broadened access to the OMO market. Eligible investors can now participate in both primary and secondary OMO markets through deposit money banks. “OMO participation (primary and secondary markets) shall be open to all eligible investors through Deposit Money Banks,” the circular specified.

Eligible investors include individuals, corporates, and non-bank financial institutions. Deposit money banks will continue to manage bid submissions and transaction settlements on behalf of their customers. This wider participation allows more entities to gain exposure to OMO instruments, although transactions will still be routed through commercial banks.

Despite the expanded participation, the CBN retains control over the volume of liquidity withdrawn through OMO and the maturity profile of securities offered. “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 circular noted.

The apex bank also maintained the existing single-bid structure for OMO auctions. OMO is a key tool for the CBN to manage liquidity, absorbing excess funds by selling securities or providing liquidity when funding conditions tighten.

The combination of broader OMO participation, the reinstatement of tenored repo transactions, and reduced restrictions on Discount Window access provides both the CBN and financial institutions with enhanced channels for liquidity management across the money market. The revised framework clearly separates the treatment of different market activities, allowing banks involved in FX and government securities auctions to access the Discount Window without prior hindrances, while still barring institutions using the facility from same-day OMO participation.

The CBN has directed all banks, authorised dealers, and market participants to comply with these revised rules immediately.