The Central Bank of Nigeria (CBN), in collaboration with the
Financial Markets Dealers Association (FMDA), has introduced the Nigerian
overnight financing rate (NOFR) to strengthen transparency in the country’s
money market.
In a statement on Friday, CBN said NOFR, a standardised
benchmark, is designed to enhance price discovery, improve monetary policy
transmission, and deepen Nigeria’s financial markets.
According to the apex bank, the benchmark was formally
adopted by market participants during a stakeholder engagement session held on
February 27, 2026, and has received regulatory approval.
“NOFR was developed to align Nigeria with global best
practices in short-term interest rate benchmarks. It is expected to improve
price discovery and transparency while promoting consistent pricing of money
market instruments,” CBN said.
“It will enhance the effectiveness of monetary policy,
support financial innovation, boost investor confidence, and strengthen risk
management across the financial system.
“The introduction of NOFR positions Nigeria alongside
leading global benchmarks such as SOFR (United States), SONIA (United Kingdom),
€STR (Eurozone), and TONA (Japan). It also complements African benchmarks such
as JIBAR (South Africa).”
The CBN added that NOFR is now operational, with the bank
serving as the benchmark administrator, and will be responsible for governance,
transparency, and regular publication of the rate.
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