CBN Eases Bank Liquidity Access, Reopens 90 Day Repo Operations

The Central Bank of Nigeria (CBN) has eased restrictions governing banks’ access to its liquidity facilities, allowing institutions that participate in foreign exchange transactions and primary government securities auctions to continue accessing the Discount Window.

The apex bank also lifted the suspension of Tenored Repo Operations, giving it the ability to provide liquidity through repurchase transactions with maturities ranging from four to 90 days.

The measures are contained in a circular dated August 12, 2026, titled Review of Discount Window Restrictions and Open Market Operations Participation Framework, signed by Okey Umeano, Acting Director of the Financial Markets Department.

The CBN said the changes followed a review of developments in the foreign exchange, money and fixed-income markets, alongside its existing frameworks for the Standing Lending Facility (SLF), Tenored Repo Operations and Open Market Operations (OMO).

Under the revised rules, participation in the Nigerian Foreign Exchange Market (NFEM) will no longer trigger restrictions on an institution’s access to the Discount Window.

The same applies to institutions participating in primary auctions of government securities. The CBN has removed restrictions that previously arose from such transactions.

The Discount Window provides eligible financial institutions with access to central bank liquidity through facilities including the SLF, making the change significant for banks managing their short-term funding and liquidity positions.

However, the CBN retained the restriction on same-day OMO participation. Institutions that access the Discount Window will still be unable to participate in an OMO auction on the same day.

The CBN’s decision to restore Tenored Repo Operations gives the apex bank another instrument for managing liquidity in the financial system.

Under the revised framework, repo operations may be conducted across approved tenors of between four and 90 days.

The CBN said the operations will be used to support effective liquidity management, improve money market functioning and strengthen monetary policy implementation.

The move allows the central bank to address liquidity conditions over periods longer than overnight or very short-term operations, giving it greater flexibility in implementing monetary policy.

The CBN has also broadened participation in the OMO market, allowing all eligible investors to participate in primary and secondary OMO transactions through Deposit Money Banks (DMBs).

The expanded investor base includes individuals, corporates and non-bank financial institutions.

DMBs will continue to submit bids and settle transactions on behalf of their customers, effectively giving a wider range of investors access to OMO instruments.

Despite the broader participation, the CBN will continue to determine the volume, tenor and frequency of OMO issuance based on prevailing liquidity conditions and its monetary policy objectives.

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

Taken together, the measures give the CBN greater flexibility in managing liquidity while reducing restrictions that could limit banks’ ability to access central bank funding.

Banks can now participate in the FX market and primary government securities auctions without those activities affecting their eligibility for the Discount Window.

At the same time, the restoration of four to 90-day repo operations gives the CBN a wider range of tools to inject or manage liquidity, while broader OMO participation could deepen the market for CBN securities.

The new provisions take immediate effect, with banks, authorised dealers and other market participants required to comply with the revised framework.