CBN Reopens OMO Market to Local Investors After Seven-Year Restriction

The Central Bank of Nigeria (CBN) has lifted its seven-year restriction on local investor participation in Open Market Operations (OMO), reopening the market to individuals, companies and non-bank financial institutions.

The policy change was announced in a circular dated August 12, 2026, signed by Okey Umeano, Acting Director of the CBN’s Financial Markets Department. The revised framework allows eligible investors to participate in both the primary and secondary OMO markets through Deposit Money Banks.

The restriction, introduced in 2019, was aimed at easing pressure on the naira, encouraging banks to lend more to the real sector and helping to reduce interest rates. Under the new arrangement, individuals, corporates and non-bank financial institutions can access OMO investments, while their banks will submit bids and complete settlements on their behalf.

The CBN also removed restrictions that had limited access to its Discount Window for institutions participating in the Nigerian Foreign Exchange Market and primary auctions of government securities. The move forms part of a broader review of the central bank’s monetary and fixed-income market operations.

Another major change is the return of Tenored Repo Operations, which had been suspended. The CBN said it can now conduct repo transactions with approved maturities ranging from four to 90 days, a step it said would improve liquidity management and strengthen the functioning of the money market.

The reopening of OMO to domestic investors could give individuals, businesses and non-bank financial institutions another channel for investing in short-term securities. It may also increase activity and liquidity in Nigeria’s fixed-income market.

However, the CBN will retain control over OMO issuance. The bank said the volume, maturity period and frequency of auctions will continue to depend on prevailing liquidity conditions and monetary policy objectives, while the existing single-bid auction format will remain in place.

The latest reforms mark a significant shift in Nigeria’s money-market framework and could reshape how domestic investors access short-term government-backed securities. The impact will depend largely on how investors respond and how the CBN manages liquidity under the new rules.