The Central Bank of Nigeria has lifted a seven-year ban on retail investor participation in its Open Market Operations (OMO) bills. Individuals, corporates, and non-bank financial institutions can now participate in these markets, marking a return to conventional monetary policy as the regulator seeks to manage liquidity ahead of expected election-related fiscal spending.

Alongside this, the CBN has eased restrictions on the Standing Lending Facility and resumed Tenored Repo Operations. Analysts suggest these moves will deepen market activity and provide the CBN with more precise tools to anchor inflation expectations without resorting to broad interest rate hikes. While these reforms are expected to improve market functioning, analysts at Quest Merchant Bank warned that broader participation may lead to yield compression, potentially impacting treasury income for commercial banks.