The Central Bank of Nigeria (CBN) has introduced the Nigerian Overnight Financing Rate (NOFR), a new benchmark designed to enhance transparency and efficiency in the country’s money market. Developed in partnership with the Financial Markets Dealers Association (FMDA), the rate will serve as a standardised reference for overnight funding, strengthening monetary policy transmission and deepening Nigeria’s financial system.
In a statement signed by Acting Director of Corporate Communications Hakama Sidi Ali, the CBN said the initiative aligns Nigeria with global best practices in short-term interest rate frameworks. It is expected to improve price discovery, ensure consistent pricing of money market instruments, promote financial innovation, boost investor confidence, and strengthen risk management across the financial system.
The NOFR places Nigeria alongside leading global benchmarks such as the Secured Overnight Financing Rate (SOFR), Sterling Overnight Index Average (SONIA), Euro Short-Term Rate (€STR), and Tokyo Overnight Average Rate (TONA). It also complements Africa’s Johannesburg Interbank Average Rate (JIBAR), reinforcing Nigeria’s integration into global financial markets.
The development followed a stakeholder engagement session on February 27, 2026, during which market participants formally adopted the rate. Regulatory approval was subsequently secured, paving the way for implementation.
The introduction of NOFR is part of broader efforts to modernise Nigeria’s financial infrastructure, improve liquidity management, and attract greater participation from domestic and international investors. By providing a credible and transparent benchmark, the CBN aims to foster a more resilient and efficient money market that can better support economic growth.
