Business
CBN reverses OMO restriction, opens market to local investors
•Lifts suspension on Tenored Repo
•Retains control over scale, timing of OMO
By Babajide Komolafe
The Central Bank of Nigeria, CBN, yesterday reversed its seven years restriction on participation of local investors in Open Market Operations, OMO, opening the market to individuals, corporates and non-bank financial institutions.
The restriction was introduced in 2019, in a bid to reduce pressure on the Naira, direct more lending to the real sector and drive down interest rates.
The reversal of the restriction was contained in a circular titled “Review of Discount Window Restrictions and Open Market Operations Participation Framework,” dated August 12, 2026 and signed by Okey Umeano, Ag. Director, Financial Markets Department.
Under the revised framework, the CBN said: “OMO participation (primary and secondary markets) shall be open to all eligible investors through Deposit Money Banks (DMBs).”
It specifically listed “individuals, corporates and non-bank financial institutions” among eligible investors, adding that DMBs “shall continue to submit bids and settle transactions on behalf of their customers.”
The apex bank also removed restrictions on access to its Discount Window arising from participation in the Nigerian Foreign Exchange Market, NFEM, and primary auctions of government securities.
According to the circular, “Restrictions on access to the Discount Window arising from participation in the Nigerian Foreign Exchange Market (NFEM) are hereby removed.
“Restrictions on access to the Discount Window arising from participation in the primary auctions of Government securities are hereby removed.
“The Central Bank of Nigeria (CBN) has reviewed existing market practices and developments in the foreign exchange, money, and fixed-income markets. The Bank has also reviewed the framework governing access to the Standing Lending Facility (SLF), Tenored Repo Operations and participation in Open Market Operations (OMO).”
The apex bank also lifted the suspension of Tenored Repo Operations, allowing it to conduct repo transactions across approved tenors of between four and 90 days.
It said: “The suspension of Tenored Repo Operations is hereby lifted,” the CBN stated, adding that the operations would support “effective liquidity management, improve money market functioning and enhance monetary policy implementation.”
The reopening of the OMO market to domestic investors is expected to provide individuals, companies and non-bank financial institutions with another avenue for investing in short-term securities, while potentially deepening activity in the money market.
The apex bank, however, retained control over the scale and timing of OMO issuance, stating that “the volume, tenor and frequency of OMO issuances shall continue to be determined by the CBN in line with prevailing liquidity conditions and monetary policy objectives.”
It also retained the existing single-bid auction structure for OMO transactions.
