The Central Bank of Nigeria (CBN) has introduced the Nigerian Overnight Financing Rate (NOFR) as the country’s new money market benchmark.
It announced this in a statement issued on Friday, signed by the Acting Director of Corporate Communications, Hakama Sidi Ali.
The move is aimed at improving transparency, strengthening monetary policy transmission, and deepening the financial system.
The apex bank said the initiative was developed in collaboration with the Financial Markets Dealers Association (FMDA) to standardise short-term interest rate pricing and align Nigeria with global best practices.
“The Nigerian Overnight Financing Rate (NOFR) is a standardized benchmark aimed at enhancing transparency, strengthening monetary policy transmission, and deepening Nigeria’s money market,” CBN stated.
According to the apex bank, the new benchmark is expected to improve price discovery and transparency while promoting consistent pricing of money market instruments.
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“It is expected to improve price discovery and transparency while promoting 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,” it said.
The bank noted that NOFR places Nigeria in line with leading global benchmarks, including 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, while also complementing Africa’s Johannesburg Interbank Average Rate (JIBAR) in South Africa.
“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),” it said.
The CBN disclosed that the benchmark followed a stakeholder engagement session held on February 27, 2026, where market participants formally adopted the rate before receiving regulatory approval.
“Following a stakeholder engagement session held on February 27, 2026, where market participants formally adopted the benchmark, and subsequent regulatory approval, NOFR is now in use, with the CBN serving as the benchmark administrator,” the statement noted.
The bank added that it would oversee governance, ensure transparency, and publish the rate regularly.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X