The Central Bank of Nigeria has reopened its Open Market Operations (OMO) market to individuals, corporates and non-bank financial institutions, reversing a restriction introduced in 2019. The August 12 circular, signed by Acting Director of the Financial Markets Department Okey Umeano, allows eligible investors to participate in primary and secondary OMO markets through deposit money banks, which will submit bids and handle settlement.
The change gives investors direct access to short-term CBN securities that have recently offered yields above 20%. Its impact was visible in the first auction after the policy change on August 13, when total bids reached about ₦4.93 trillion against ₦600 billion offered across 103-day and 138-day bills. The CBN allotted ₦2.60 trillion, with stop rates of 20.39% and 20.01%, respectively. The scale of subscriptions indicates strong demand, although the auction data does not establish how much came specifically from retail investors.
The circular also removed restrictions linking participation in the Nigerian Foreign Exchange Market and primary government-securities auctions to access to the CBN's Discount Window, while restoring Tenored Repo Operations across four- to 90-day maturities. However, institutions accessing the Discount Window cannot participate in an OMO auction on the same day.
The reforms are intended to improve liquidity management and money-market functioning. Investors should watch subsequent OMO auctions for demand, allotment volumes and yields, while noting that the CBN retains discretion over future issuance size, tenor and frequency.
.jpg)
