By Yusuf Danjuma Yunusa
The Central Bank of Nigeria (CBN), in partnership with the Financial Markets Dealers Association (FMDA), has unveiled the Nigerian Overnight Financing Rate (NOFR), a new benchmark interest rate designed to enhance transparency and strengthen monetary policy transmission in the country’s money market.
The announcement came in a memo issued Friday by Hakama Sidi Ali, the CBN’s director of corporate communications.
“The Central Bank of Nigeria, in collaboration with the Financial Markets Dealers Association, today announced the introduction of the Nigerian Overnight Financing Rate, a standardized benchmark aimed at enhancing transparency, strengthening monetary policy transmission, and deepening Nigeria’s money market,” the memo stated.
According to the apex bank, the NOFR was developed to align Nigeria with global best practices in short-term interest rate benchmarks and improve the pricing of money market instruments. The CBN said the new benchmark will also enhance price discovery, promote consistent market pricing, and support better risk management across the financial system.
Mrs. Ali noted that the NOFR positions Nigeria alongside leading global benchmarks, including the SOFR in the United States, SONIA in the United Kingdom, €STR in the Eurozone, and TONA in Japan. It also complements African benchmarks such as South Africa’s JIBAR.
A stakeholder engagement session was held on February 27, 2026, where market participants formally adopted the benchmark. Following subsequent regulatory approval, the NOFR is now in use, with the CBN serving as the benchmark administrator.
The bank has committed to ensuring governance, transparency, and regular publication of the rate, Mrs. Ali added.
