The Central Bank of Nigeria (CBN) has announced the introduction of the Nigerian Overnight Financing Rate (NOFR), a new benchmark designed to enhance transparency and efficiency in the country’s money market.
In collaboration with the Financial Markets Dealers Association (FMDA), the apex bank said the rate will serve as a standardised reference for overnight funding, strengthening monetary policy transmission and deepening Nigeria’s financial system.
The announcement was contained in a statement issued on Friday and signed by the Acting Director of Corporate Communications, Hakama Sidi Ali.
According to the CBN, the NOFR aligns with global best practices in short-term interest rate frameworks, improving price discovery and ensuring more consistent pricing of money market instruments.
The bank said: “The Nigerian Overnight Financing Rate is expected to improve transparency, promote financial innovation, boost investor confidence, and strengthen risk management across the financial system.”
With its introduction, Nigeria joins countries that operate similar benchmark rates, including the Secured Overnight Financing Rate (SOFR) in the United States, SONIA in the United Kingdom, €STR in the Eurozone, and TONA in Japan. It also aligns with regional benchmarks such as South Africa’s Johannesburg Interbank Average Rate (JIBAR).
The CBN noted that the development of the benchmark followed a stakeholder engagement session held on February 27, 2026, during which market participants approved the framework. This was followed by regulatory approval for implementation.
The bank added that the initiative reinforces Nigeria’s integration into global financial markets while supporting more efficient and transparent pricing in the money market.
