CBN relaxes bank lending rules, widens open market access
Nigeria's central bank eases bank access to its discount window, revives tenored repos, and expands OMO participation to deepen markets.
The Central Bank of Nigeria (CBN) has announced a series of measures to enhance liquidity management and strengthen monetary policy transmission across the financial system.
In a circular dated August 12, the regulator removed, with immediate effect, restrictions that had tied banks' access to its Standing Lending Facility (SLF) to their participation in foreign exchange markets and primary government debt auctions. However, limits on same-day open market operations (OMO) remain in place.
The CBN has also lifted the suspension on tenored repo operations. It said it may now conduct repo transactions with maturities ranging from four to 90 days, a move designed to support liquidity management and improve money market functioning.
Additionally, participation in OMO auctions, in both primary and secondary markets, has been expanded to include all eligible investors. This now covers individuals, corporates, and non-bank financial institutions, who can access these instruments through deposit money banks.
These changes provide banks with greater flexibility to manage short-term liquidity while operating in foreign exchange and debt markets. The revival of repo operations gives the central bank another tool for liquidity control, while broader access to OMO bills could deepen Nigeria's money and fixed-income markets.