CBN relaxes borrowing rules for banks trading FX, government securities

The Central Bank of Nigeria (CBN) has relaxed significant restrictions that previously prevented banks involved in foreign exchange transactions and government securities auctions from accessing its Discount Window. These changes are part of a broader effort to enhance liquidity management and refine money market operations across the country.

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Restrictions on access to the Discount Window arising from participation in the Nigerian Foreign Exchange Market are hereby removed.

In addition to easing access to the Discount Window, the apex bank has lifted the suspension on tenored repurchase transactions. Furthermore, the CBN has broadened the scope of participation in its Open Market Operations (OMO) to include a wider range of eligible investors, such as individuals, companies, and non-bank financial institutions.

These adjustments were detailed in a circular titled “Review of Discount Window Restrictions and Open Market Operations Participation Framework,” published on the CBN’s website on Wednesday. The circular, dated August 12, 2026, and signed by Okey Umeano, Acting Director of the Financial Markets Department, outlines the revised framework governing access to the Standing Lending Facility, tenored repo operations, and OMO.

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Restrictions on access to the Discount Window arising from participation in the primary auctions of Government securities are hereby removed.

The CBN stated that the revisions followed a comprehensive review of market developments and existing practices in Nigeria’s foreign exchange, money, and fixed-income markets. The Standing Lending Facility, a key component of the CBN’s Discount Window, provides eligible banks with short-term liquidity to manage temporary funding needs. Previously, certain market activities could disqualify financial institutions from using this facility. The new circular introduces a more differentiated approach, removing some of these disqualifying factors while maintaining specific rules for same-day participation in OMO auctions.

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The existing restriction on participation in OMO auctions by institutions accessing the Discount Window on the same day shall remain in force.