The Central Bank of Nigeria (CBN), in collaboration with the Financial Markets Dealers Association (FMDA), has announced the introduction of the Nigerian Overnight Financing Rate (NOFR) as a new benchmark for the country’s money market.
The development was disclosed in a statement issued on Friday in Abuja by Hakama Sidi-Ali, Acting Director of the CBN’s Corporate Communications Department.
Sidi-Ali described NOFR as a standardised benchmark designed to enhance transparency, strengthen monetary policy transmission, and deepen Nigeria’s financial markets.
According to her, the rate was developed in line with global best practices for short-term interest rate benchmarks and is expected to improve price discovery and ensure consistent pricing of money market instruments.
“It will enhance the effectiveness of monetary policy, support financial innovation, boost investor confidence, and strengthen risk management across the financial system,” she said.
She added that the introduction of NOFR places Nigeria alongside major global benchmarks such as the Secured Overnight Financing Rate (SOFR) in the United States, the Sterling Overnight Index Average (SONIA) in the United Kingdom, the Euro Short-Term Rate (€STR) in the Eurozone, and the Tokyo Overnight Average Rate (TONA) in Japan.
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The benchmark also aligns with African standards such as the Johannesburg Interbank Average Rate (JIBAR) in South Africa.
Sidi-Ali noted that following a stakeholders’ engagement held on February 27, where market participants adopted the framework, and after receiving regulatory approval, NOFR is now operational, with the CBN serving as its administrator.
She assured that the apex bank would ensure strong governance, transparency, and regular publication of the rate
