CBN Eases Rules for Banks, Opens Up FX and Government Securities Access

The Central Bank of Nigeria (CBN) has relaxed restrictions on financial institutions that access its liquidity support facility, allowing them to continue participating in foreign exchange transactions and government securities auctions.

The apex bank announced the changes in a circular dated August 12, 2026, issued to Deposit Money Banks, authorised dealers and the general public by the Acting Director of its Financial Markets Department, Okey Umeano.

Under the revised rules, banks and other eligible institutions that obtain funding through the CBN’s Standing Lending Facility (SLF) will no longer be barred from participating in the Nigerian Foreign Exchange Market (NFEM) or primary auctions for government securities.

The new rules took effect immediately.

CBN Gives Banks More Liquidity Flexibility

The central bank said the changes followed a review of developments in the foreign exchange, money and fixed-income markets.

The adjustment effectively removes two restrictions that previously affected institutions that accessed the CBN’s discount window.

The move is expected to give banks greater flexibility in managing their liquidity while allowing them to participate more freely in key financial markets.

However, the CBN retained a restriction preventing institutions that access the Discount Window on a particular day from participating in Open Market Operations (OMO) auctions on the same day.

The decision suggests that while the apex bank is giving financial institutions more room to operate across markets, it still wants to prevent simultaneous access to its liquidity support and its own same-day liquidity-management operations.

Wider Access to OMO Transactions

The revised framework also expands participation in OMO transactions.

Individuals, companies and non-bank financial institutions can now participate in both primary and secondary OMO markets through Deposit Money Banks.

Banks will continue to submit bids and settle transactions on behalf of their customers, widening access to government-backed monetary policy instruments beyond traditional institutional investors.

Despite the broader investor base, the CBN said it would retain control over the scale, timing, tenor and frequency of OMO issuances.

These factors will continue to depend on prevailing liquidity conditions and the central bank’s monetary policy objectives.

The existing single-bid auction system will also remain in place.

CBN Restores Repo Operations

Another major change is the return of tenored repurchase, or repo, operations, which had previously been suspended.

Repos allow the CBN to inject or withdraw liquidity from the financial system by conducting transactions involving eligible securities for specified periods.

Under the revised framework, the central bank can conduct repo operations with maturities ranging from four to 90 days.

The CBN said the measure would provide an additional tool for managing liquidity, improve the functioning of the money market and strengthen the transmission of monetary policy.

New Framework Builds on Earlier Reforms

The latest changes build on previous reforms to the CBN’s monetary policy and financial market operating framework.

The central bank had introduced guidelines for access to its Discount Window in October 2022, while its framework for OMO auction participation dates back to 2019.

The revised rules now provide a clearer distinction between activities that should restrict access to central bank liquidity and those that should not.

Participation in the foreign exchange market and government securities auctions will no longer prevent eligible institutions from accessing the Discount Window.

The CBN, however, maintained the same-day OMO restriction, preserving a safeguard around its liquidity-management operations.

The apex bank directed banks, authorised dealers and other market participants to comply fully with the revised framework.