The Central Bank of Nigeria (CBN) has relaxed conditions governing banks’ access to its discount window, removing restrictions previously linked to foreign exchange transactions and purchases of government securities.
The changes were contained in a circular issued on Wednesday and signed by Okey Umeano, acting director of the CBN’s Financial Markets Department.
The apex bank also announced the immediate restoration of tenored repurchase (repo) operations, with maturities ranging from four to 90 days.
The discount window, also known as the Standing Lending Facility (SLF), enables banks to obtain short-term liquidity from the central bank when they face funding pressures.
Under the revised framework, banks that participate in the Nigerian Foreign Exchange Market (NFEM) will no longer be barred from accessing the discount window.
The CBN also removed restrictions that previously applied to banks participating in primary auctions of government securities.
The move effectively gives banks greater flexibility to participate in key financial markets while retaining access to central bank liquidity when required.
“The CBN has adopted a differentiated approach to access restrictions on the Standing Lending Facility (SLF)/Discount Window,” the circular stated.
It clarified, however, that the existing restriction preventing institutions from participating in OMO auctions while accessing the discount window on the same day would remain.
The central bank said the lifting of the restrictions on FX and government securities transactions was intended to improve the functioning of the financial system and strengthen liquidity management.
On repo operations, the CBN said it had lifted the suspension of tenored repos, allowing it to provide liquidity through transactions with approved maturities between four and 90 days.
According to the apex bank, the measure would support more effective liquidity management, improve money market operations and strengthen the transmission of monetary policy.
The CBN also widened the framework for participation in Open Market Operations (OMO), allowing individuals, corporate entities and non-bank financial institutions to participate through deposit money banks.
Under the arrangement, banks will submit bids and undertake settlement on behalf of their customers.
The regulator said the scale, maturity and frequency of OMO issuances would continue to be guided by prevailing liquidity conditions and the objectives of monetary policy.
It further retained the existing single-bid auction format for OMO transactions.
The CBN directed banks, authorised dealers and other financial market participants to comply with the revised provisions, which took effect immediately.
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