The Central Bank of Nigeria (CBN) has widened access to its Open Market Operations (OMO), allowing a broader group of eligible investors to participate in both the primary and secondary OMO markets through deposit money banks, according to Bloomberg and BusinessDay. The change forms part of a broader review of the CBN’s monetary policy framework announced on August 12, as the regulator seeks to improve liquidity management and strengthen the transmission of monetary policy across the financial system.
Under the revised framework, eligible investors can now access OMO securities through commercial banks rather than being limited to the previous market structure. The CBN is also resuming longer tenor repurchase operations, while changes to its Standing Lending Facility have removed restrictions that previously prevented banks from accessing the discount window after participating in foreign exchange transactions or primary government securities auctions.
The reforms could deepen Nigeria’s money market by broadening participation and improving the channels through which the CBN manages liquidity. OMO is a key monetary policy instrument used to influence short term interest rates and banking system liquidity, and CBN data shows that the bank has increasingly relied on OMO alongside other tools to manage financial conditions.
For banks, institutional investors and other eligible market participants, the changes could create greater access to short term investment instruments while improving liquidity management. The next test will be whether wider participation and the revised operating framework translate into more efficient money market pricing, stronger policy transmission and greater stability in Nigeria’s financial markets.
