Central Bank of Nigeria expands OMO access and launches digital asset sandbox

The Central Bank of Nigeria (CBN) is implementing several strategic shifts to manage liquidity and promote financial innovation. The bank has launched the second cohort of its Regulatory Sandbox Programme, featuring two tracks: the ‘Virtual Asset Service Provider (VASP) Track’ for testing digital assets and stablecoins, and the ‘Data-Enabled Financial Services Track’ to improve financial inclusion through secure digital infrastructure.

In a significant policy reversal, the CBN has reopened access to Open Market Operations (OMO) securities to individuals, corporations, and non-bank financial institutions. This move, effective August 12, 2026, ends a restriction placed in 2019 and allows these entities to participate in primary and secondary markets through deposit money banks. Analysts suggest this could increase competition for funds, potentially pressuring the Nigerian Exchange as investors seek the higher yields offered by OMO instruments compared to equities.

Concurrently, the Nigerian fixed-income market is seeing robust demand. Treasury bill auctions have seen massive oversubscription, with investors submitting trillions of Naira in bids. While headline inflation showed signs of moderation, dropping to 15.43% in July from 15.91% in June, high interest rates continue to drive strong appetite for short-term government securities and OMO bills.