Banks can now access Discount Window despite FX and government securities transactions….
The Central Bank of Nigeria has relaxed some restrictions governing banks’ access to its Discount Window, in a move aimed at improving liquidity management and strengthening money market operations.
Under the revised framework, banks participating in the Nigerian foreign exchange market or primary auctions of government securities will no longer be barred from accessing the CBN’s Discount Window solely because of those activities.
The changes were announced in a circular titled “Review of Discount Window Restrictions and Open Market Operations Participation Framework,” issued on Wednesday, August 12, 2026.
The circular, signed by the Acting Director of the Financial Markets Department, Okey Umeano, was addressed to deposit money banks, authorised dealers and the general public.
The CBN said the review followed developments in the foreign exchange, money and fixed-income markets, as well as an assessment of its existing framework for the Standing Lending Facility, tenored repo operations and Open Market Operations.
The Standing Lending Facility, which is part of the CBN’s Discount Window, provides eligible banks with short-term liquidity when they experience temporary funding pressures.
Under the revised rules, the apex bank has removed restrictions previously triggered by participation in the Nigerian Foreign Exchange Market and primary auctions of government securities.
However, the CBN retained its restriction on same-day participation in Open Market Operations.
It stated that institutions accessing the Discount Window would remain ineligible to participate in OMO auctions on the same day.
The retained provision maintains a separation between institutions obtaining liquidity from the CBN and those participating in OMO transactions within the same trading day.
The apex bank also lifted the suspension on tenored repurchase operations, giving it an additional instrument for managing liquidity within the financial system.
The CBN said it could now conduct repo transactions with maturities ranging from four to 90 days, depending on prevailing liquidity conditions and monetary policy objectives.
Repo operations involve the temporary exchange of securities for cash, with the transaction reversed at an agreed future date.
The CBN said restoring the facility would support more effective liquidity management, improve the functioning of the money market and strengthen monetary policy implementation.
For banks, the availability of four-to-90-day repos provides an alternative to relying solely on overnight liquidity facilities when managing funding requirements.
The CBN also expanded participation in its Open Market Operations, allowing a wider range of investors to participate in both primary and secondary OMO markets through deposit money banks.
Eligible participants now include individuals, corporate entities and non-bank financial institutions.
Under the framework, commercial banks will continue to submit bids and settle transactions on behalf of their customers.
The move broadens access to OMO instruments beyond traditional institutional participants, although investors will still be required to transact through deposit money banks.
The CBN retained authority over the volume, maturity and frequency of OMO issuances, saying these would continue to be determined by prevailing liquidity conditions and its monetary policy objectives.
The existing single-bid structure for OMO auctions will also remain in place.
OMO remains one of the CBN’s key tools for managing liquidity. Through the sale of securities, the apex bank can absorb excess funds from the financial system and influence money market conditions.
The combination of wider OMO participation, the restoration of tenored repo operations and the removal of some Discount Window restrictions gives the CBN and financial institutions additional channels for managing liquidity.
The revised framework takes immediate effect, with the apex bank directing banks, authorised dealers and other market participants to comply with the new provisions.
