The Central Bank of Nigeria (CBN), in collaboration with the Financial Markets Dealers Association (FMDA), has introduced the Nigerian Overnight Financing Rate (NOFR), a new benchmark designed to improve transparency and efficiency in the country’s financial system.
The announcement was made on Friday in Abuja by the CBN’s Acting Director of Corporate Communications, Mrs. Hakama Sidi-Ali.
According to Sidi-Ali, the NOFR is a standardised short-term interest rate benchmark aimed at strengthening monetary policy transmission and deepening activities in Nigeria’s money market.
She explained that the new rate aligns Nigeria with global best practices and is expected to enhance price discovery while promoting more consistent pricing of financial instruments.
“The introduction of NOFR will improve transparency in the market and support the effectiveness of monetary policy,” she said. “It will also encourage financial innovation, boost investor confidence, and strengthen risk management across the financial system.”
Sidi-Ali noted that the development places Nigeria alongside leading 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), and the Tokyo Overnight Average Rate (TONA) in Japan. It also complements Africa’s Johannesburg Interbank Average Rate (JIBAR) in South Africa.
She further disclosed that the benchmark was formally adopted by market participants following a stakeholders’ engagement session held on February 27 and subsequent regulatory approval.
The CBN will serve as the administrator of the NOFR, ensuring its governance, transparency, and regular publication.
Financial analysts say the move is a significant step toward modernising Nigeria’s financial architecture and improving confidence in the country’s money markets.
