Nigeria’s central bank is turning to a market it locked individuals out of seven years ago as a fresh line of defense against an anticipated wave of election-related spending.
The Central Bank of Nigeria has reversed a 2019 restriction that confined its Open Market Operations bills, which are among the highest-yielding, lowest-risk instruments in the naira market, to banks and select institutional players.
Under the revised framework, individuals, corporates and non-bank financial institutions can now participate in both primary and secondary OMO markets, bidding and settling transactions through Deposit Money Banks.
The reversal is one part of a broader liquidity overhaul. The CBN has also eased restrictions on banks’ access to its Standing Lending Facility, or Discount Window, removing curbs tied to participation in foreign exchange transactions and primary auctions of government securities.
One restriction remains in place: institutions that tap the Discount Window still cannot bid in OMO auctions on the same day.
