CBN lifts discount window curbs tied to FX, securities

The Central Bank of Nigeria has removed restrictions that barred financial institutions active in the Nigerian Foreign Exchange Market from tapping its Discount Window. The change, announced in a circular dated August 12, 2026, also lifts the same restriction for banks participating in primary auctions of government securities.

The circular, titled “Review of Discount Window Restrictions and Open Market Operations Participation Framework,” was signed by Okey Umeano, Acting Director of the Financial Markets Department. The new directives took immediate effect.

Contents

01

What the Discount Window change means

02

Tenored repo operations return

03

OMO access widens, with one limit kept

04

How the framework will operate

What the Discount Window change means

The Discount Window, which includes the Standing Lending Facility, is the channel through which eligible financial institutions borrow liquidity directly from the central bank. Under the revised framework, participation in the Nigerian Foreign Exchange Market will no longer automatically disqualify an institution from accessing that facility.

The CBN extended the same treatment to primary auctions of government securities, removing the previous restriction tied to participation in those auctions. In practice, banks that trade in the FX market or buy government securities will no longer be automatically blocked from borrowing through the Discount Window when they need liquidity.

Tenored repo operations return

The CBN also lifted the suspension of Tenored Repo Operations, giving it room to conduct repurchase transactions across approved maturities ranging from four to 90 days. A repo, or repurchase agreement, is a short-term collateralised loan.

The revised framework builds on the October 7, 2022 circular governing access to the Discount Window and the October 23, 2019 directive on OMO auctions.

OMO access widens, with one limit kept

The CBN expanded access to primary and secondary Open Market Operations securities to individuals, corporates and non-bank financial institutions through Deposit Money Banks, which will continue to submit bids and settle transactions on behalf of their customers.

However, the regulator retained one restriction: institutions accessing the Discount Window cannot participate in an OMO auction on the same day. This creates a differentiated regime in which banks can operate in the FX market and government securities auctions without losing Discount Window access, while the same-day limit remains for OMO auctions.

How the framework will operate

The CBN said the volume, tenor and frequency of OMO issuances will continue to be determined by the central bank in line with prevailing liquidity conditions and monetary policy objectives. OMO auctions will also continue under the existing single-bid auction structure.

Banks, authorised dealers and other market participants have been directed to comply with the revised framework, which took effect immediately.