CBN, FMDA Launch Nigerian Overnight Financing Rate as New Benchmark for Money Market
Oru Leonard
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 NOFR, unveiled as part of efforts to modernize Nigeria’s financial system, is designed to enhance transparency, improve price discovery, and strengthen the transmission of monetary policy across the economy.
In a statement, the Acting Director of Corporate Communications at the CBN, Hakama Sidi Ali, said the new benchmark aligns Nigeria with global best practices in short-term interest rate frameworks.
She explained that “the Nigerian Overnight Financing Rate (NOFR) is expected to improve transparency in the money market, promote consistent pricing of financial instruments, and enhance the effectiveness of monetary policy.”
According to her, the adoption of NOFR will also support financial innovation, boost investor confidence, and strengthen risk management within Nigeria’s financial system.
The benchmark places Nigeria alongside major global reference rates 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. It also aligns with Africa’s Johannesburg Interbank Average Rate (JIBAR) in South Africa.
Hakama noted that the development followed extensive stakeholder engagement, including a session held on February 27, 2026, where market participants formally adopted the benchmark, alongside subsequent regulatory approvals.
“With the launch of NOFR, the CBN will serve as the benchmark administrator, ensuring proper governance, transparency, and regular publication of the rate,” she added.
The introduction of NOFR marks a significant step in deepening Nigeria’s money market and positioning the country’s financial system in line with international standards.
