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CBN reverses OMO restriction, opens market to local investors
🇳🇬 Nigeria /Economy & Trade

CBN reverses OMO restriction, opens market to local investors

From Vanguard · () English

Summarized and contextualized by DistantNews.

At a glance

News Official statement New plan
  • The Central Bank of Nigeria has lifted a seven-year restriction on local investors participating in Open Market Operations (OMO).
  • This reversal allows individuals, corporations, and non-bank financial institutions to invest in short-term securities through their banks.
  • The CBN aims to deepen money market activity while retaining control over OMO issuance scale and timing.

The Central Bank of Nigeria (CBN) has reversed a seven-year ban on local investors participating in Open Market Operations (OMO). The restriction, imposed in 2019 to curb pressure on the Naira and encourage lending to the real sector, is now lifted.

OMO participation (primary and secondary markets) shall be open to all eligible investors through Deposit Banks (DMBs).

— Central Bank of NigeriaDescribing the revised framework for Open Market Operations.

The CBN announced the change in a circular dated August 12, 2026, signed by Okey Umeano of the Financial Markets Department. Under the new framework, OMO participation in both primary and secondary markets is open to all eligible investors, including individuals, corporations, and non-bank financial institutions. Deposit Money Banks will continue to facilitate these transactions on behalf of their customers.

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

— Central Bank of NigeriaAnnouncing the removal of specific discount window restrictions.

Additionally, the CBN removed restrictions on accessing its Discount Window that were linked to participation in the Nigerian Foreign Exchange Market and primary government securities auctions. The suspension of Tenored Repo Operations, which allows for repo transactions across various tenors, has also been lifted. These measures are intended to support effective liquidity management and improve money market functioning.

The suspension of Tenored Repo Operations is hereby lifted.

— Central Bank of NigeriaAnnouncing the lifting of the suspension on Tenored Repo Operations.

The reopening of the OMO market to domestic investors is expected to offer a new investment avenue for short-term securities and potentially boost activity in the money market. However, the CBN will maintain its authority over the volume, tenor, and frequency of OMO issuances, aligning them with liquidity conditions and monetary policy goals. The single-bid auction structure for OMO transactions remains in place.

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.

— Central Bank of NigeriaStating the CBN's continued control over OMO issuance.
DistantNews Editorial

Originally published by Vanguard. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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