CBN eases FX Discount Window rules, ends tenored repo ban effective immediately
The Central Bank of Nigeria announced on August 12, 2026 that it has removed foreign exchange transaction restrictions on Discount Window access for institutions participating in the Nigerian Foreign Exchange Market and primary auctions of government securities. The suspension of tenored Repurchase (Repo) operations has also been lifted. However, the existing rule that bars institutions from participating in Open Market Operations auctions on the same day they access the Discount Window remains in force. The changes were outlined in a circular signed by Okey Umeano, Acting Director of the Financial Markets Department, and take effect immediately.
This move eases liquidity pressures on banks and other financial institutions that need to fund FX trades or manage short-term funding needs. By removing the FX-linked Discount Window barrier, the CBN aims to improve market functioning in the foreign exchange and money markets, especially amid recent naira volatility. The continued OMO restriction, however, means firms cannot simultaneously tap the Discount Window for same-day funding and bid in OMO auctions, preserving a buffer against potential arbitrage.
Market participants should note that the revised framework is active from today, with no announcement of a future review date. Access to the Discount Window for FX-related transactions now follows the standard application process, while tenored Repo transactions can resume under existing terms. Will banks increase their reliance on the Discount Window for FX funding, or will they continue to favor other sources given the unchanged OMO rule?